State Farm to acquire automobile insurer GAINSCO for $400m
State Farm acquisition of GAINSCO : US property and casualty insurance giant State Farm Mutual Automobile Insurance has agreed to acquire Texas-based insurance holding company GAINSCO in an all-cash deal worth about $400 million.
GAINSCO, which is focused on the non-standard personal automobile insurance market, has expertise in providing minimum-limits personal auto insurance.
Founded in 1978, the insurance holding company is the owner of the insurance brand – GAINSCO Auto Insurance.
Specializing in minimum-limits personal auto coverage, GAINSCO Auto Insurance through its independent retail agents distributes nonstandard personal auto products. The automobile insurer serves the states of Arizona, Florida, Oklahoma, Georgia, New Mexico, South Carolina, Utah, Virginia, Tennessee, Texas, Ohio, and Alabama.
Commenting on State Farm acquisition of GAINSCO, Glenn Anderson – CEO of GAINSCO said: “State Farm has an extraordinary market reputation and a highly capable independent contractor agency system.
“GAINSCO looks forward to providing our very successful minimum limits auto insurance program to State Farm agents in the future, while continuing to partner with our own outstanding agency system as we expand across the country. We are excited that, in joining forces with State Farm, we will accelerate our long term mission to become the best nationwide non-standard personal auto insurer in the industry.”
For State Farm, the deal marks its first acquisition of an insurance firm in its nearly 100-year history.
As per the terms of the deal, shareholders of GAINSCO will get nearly $107.38 per share in cash. GAINSCO will continue to run as an independent company and brand with a continued focus on its current goals.
Over the course of time, the parties anticipate providing State Farm agents the scope to distribute GAINSCO products in addition to the former’s products and services.
Michael Tipsord – State Farm President, Chairman, and CEO, commenting on State Farm acquisition of GAINSCO, said: “We believe this acquisition positions both our company and GAINSCO well for future growth.
“Because of our competitive value, broad line of products, and exceptional customer service from our employees and 19,200 State Farm independent contractor agents, customers have made us the largest property and casualty insurer for several decades.
“We are excited for the opportunity State Farm agents will have to serve a market that has historically not been open to them. This will help us further toward our goal of serving more customers in more ways.”
The closing of State Farm acquisition of GAINSCO, is subject to approval by the latter’s shareholders, regulatory approvals, and the meeting of other customary closing conditions.