Medical Protective to Acquire Princeton Insurance
Princeton offices & policyholder services to remain in New Jersey…
Princeton policyholders to benefit from Berkshire Hathaway's unmatched financial strength
NEW YORK, NY, PRINCETON, NJ and FORT WAYNE, IN – September 28, 2011 – Medical Liability Mutual Insurance Company (MLMIC) and Medical Protective Company (MedPro), a Berkshire Hathaway (NYSE:BRK) subsidiary, today announced that they have entered into a definitive agreement for the sale of Princeton Insurance Company, one of the Northeast's premiere professional liability insurers for healthcare providers, subject to regulatory filings, review and approvals.
The directors and shareholders of MLMIC, Princeton and MedPro have approved the agreement that provides for MedPro's purchase of 100% ownership of Princeton from MLMIC in an all-cash transaction. The acquisition, which is subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2011.
"MedPro's acquisition of Princeton, if approved, would ensure that there is continuity of Princeton's medical professional liability coverage for its current policyholders and enable Princeton to continue its mission in the future," said MLMIC's President, Robert A. Menotti, M.D. "At the same time, this transaction would maximize the value of Princeton for our MLMIC policyholders. Further, MLMIC would benefit by being able to focus entirely on its commitment to New York State healthcare providers, offering the highest quality professional liability insurance to physicians, dentists, hospitals, and other healthcare providers at the lowest possible cost consistent with long term viability. We have been pleased with the efficient and smooth acquisition process we have experienced with Berkshire's MedPro and extend our best wishes to Princeton employees for continued success."
Based in Princeton, New Jersey, Princeton Insurance employs over 100 people and serves over 13,000 healthcare providers; it has annualized gross written premiums of approximately $140 million and surplus at 2nd quarter-end of approximately $400 million. Princeton's principal operations would remain in Princeton, New Jersey where it was founded in 1975, and twenty-eight year employee Charles Lefevre would remain as President. Lefevre commented, "We are grateful for the support MLMIC and their leadership have provided to Princeton over this past decade in our mission to serve healthcare providers. We look forward to the enhanced product offerings, unmatched financial strength and to leveraging more than a century of experience that Berkshire's MedPro would provide to Princeton. This transaction represents a positive step forward in assisting healthcare providers meet the challenges they face in a changing healthcare environment, and a positive step for our dedicated agents and employees as well."
With the industry-leading financial strength of Berkshire's MedPro supporting Princeton upon the closing of the transaction, Princeton – currently not rated by leading insurance rater A.M. Best – is expected to apply for financial strength ratings and be positioned to offer additional products and services to healthcare providers throughout the region.
Tim Kenesey, MedPro's President and CEO, said: "This is a win for Princeton policyholders and agents, who would continue to enjoy the same terrific local service long-provided by Princeton, but would soon have the financial strength of MedPro's industry-leading level, and soon have service enhancements and additional product offerings … it is a win for MLMIC, who enjoyed a fast and efficient ‘transaction process' … and it is a win for MedPro as we strengthen our Northeast business and – importantly – enhance our capabilities in the growing hospital segment."
Warren Buffett, Chairman of Berkshire Hathaway, added: "We've been absolutely delighted with our acquisition of MedPro in 2005, and look forward to MedPro completing additional ‘add-on' transactions with companies – like Princeton – who seek the world's most stable home for their policyholders in a very unstable and changing healthcare liability landscape."
Sandler O'Neill + Partners, L.P. acted as exclusive financial advisor to MLMIC.
About Princeton Insurance
Princeton Insurance is the largest healthcare professional liability insurer in New Jersey, serving the state's hospitals and individual medical and healthcare professionals continuously since 1975. With responsibility for over 19,000 healthcare providers and approximately $200 million in annual premium, Princeton is New Jersey's leader in professional liability coverage and risk solutions for healthcare providers, including hospitals, physicians, dentists, chiropractors, optometrists, podiatrists, other healthcare professionals, and other healthcare facilities. Princeton is a MedPro/Berkshire Hathaway company with an A+ (Superior) rating from A.M. Best.
Click here for more information about Princeton Insurance.
About Medical Protective
With over $800 million in annual premium, Medical Protective is a national leader in primary healthcare professional liability coverage and risk solutions for physicians, dentists, hospitals, healthcare facilities and other healthcare professionals. As the nation's first provider of healthcare professional liability insurance, Medical Protective has been protecting the assets and reputations of healthcare providers for more than 110 years. Offerings include professional liability insurance on both claims-made and occurrence forms, risk management consulting and education, premium finance solutions and – through affiliates and partners – additional products and services for healthcare providers. Healthcare professional liability insurance products are underwritten and provided by The Medical Protective Company, rated AA+ (Very Strong) by Standard & Poor's and A++ (Superior) by A.M. Best, and its affiliates on both admitted and excess and surplus paper, and are distributed through a nationwide network of employee sales managers, appointed agents and brokers. Medical Protective is a Berkshire Hathaway business. More information about Medical Protective is available at www.medpro.com.