RICHMOND, Virginia and
BEDFORD, Texas, July 26, 2017 /PRNewswire/ -- Markel Corporation
("Markel") (NYSE: MKL) and State National Companies, Inc. (NASDAQ:
SNC) today announced that they have entered into a definitive
agreement under which Markel will acquire all of the outstanding
shares of State National common stock for $21.00 per share in cash. The transaction has a
total value of approximately $919
million.
The agreement, which has been unanimously approved by both
companies' board of directors, represents a 38% premium to State
National's 30-day volume-weighted average stock price as of
May 18, 2017, the last trading day
prior to published market speculation regarding a potential sale of
State National, and a premium of approximately 7% to State
National's closing stock price on July
25, 2017.
The transaction brings together two values-driven organizations
with a shared commitment to innovation, service, and long-term
relationships. State National's two core businesses, Program
Services and Lender Services, are well positioned to capitalize on
changing market dynamics and new opportunities. State National is
the largest and longest-standing pure-play U.S. insurance fronting
business with approximately $1.3
billion in gross written premium (2016) and more than 60
programs. State National is also the leading collateral protection
insurance provider in the U.S.
Richard R. Whitt, Markel's
Co-Chief Executive Officer said, "We are excited to be joining
forces with State National—an industry leader with a talented
management team that has delivered exceptional long-term results.
In addition, we are impressed by the cultural fit between our two
organizations. Strategically, State National will help us to
leverage our Insurtech and digital distribution initiatives,
diversify our underwriting and fee based portfolios and revenue
streams, and add to Markel's third party capital capabilities.
Combining Markel's financial strength with State National's unique
business model and proven record of success, we are confident that
all stakeholders will be well served moving forward."
Terry Ledbetter, State National's
Chairman and Chief Executive Officer, said, "After careful and
thorough analysis of a range of opportunities, our board of
directors determined this transaction with Markel to be in the best
interest of State National and our shareholders. We believe the
transaction appropriately recognizes the value of State National's
business model, recent growth and future market opportunities as a
leading specialty provider of property and casualty insurance
services operating in two niche markets throughout the United States, and provides our
shareholders with an immediate and attractive cash premium for
their investment in State National.
"We believe this transaction with Markel is good for our
employees and clients, as well as our shareholders. Markel
recognizes our shared commitment to offering unique, high-quality
solutions that simplify the complexities of insurance for clients
nationwide. We have long respected Markel and are proud to partner
with this distinguished company that has a strong reputation and
proven track record of success in acquiring and partnering with
insurance companies. Markel understands the uniqueness of our
business model, and will be a tremendous asset as we, together,
build upon our leadership position and specialty insurance service
offerings, and continue to implement our strategic plan to deliver
enhanced value for our clients. This transaction is all about
growth, not cost-cutting, and we believe that State National
employees will benefit from being part of a larger, stronger,
growth-oriented company with a more diversified platform. Our
success is driven by the ongoing efforts of our talented employees
and I thank them for their continued hard work and dedication. We
look forward to working with Markel to quickly complete the
transaction and are committed to ensuring a smooth transition."
The transaction, which is subject to the approval of a majority
of State National shareholders, approvals by relevant state
insurance regulators and other customary closing conditions, is
expected to close in the fourth quarter of 2017. The transaction is
not subject to any financing condition, and Markel plans to finance
the transaction using cash balances on hand. Members of the
Ledbetter family have entered into a voting agreement with Markel
in support of the merger. CF SNC Investors LP has entered into a
separate similar voting agreement with Markel. As a result of these
voting agreements, approximately 37% of State National's common
stock is committed to vote in favor of the transaction.
Upon completion of the transaction, State National will operate
as a separate business unit. The management team, led by
Terry Ledbetter, State National's
current Chairman and Chief Executive Officer will remain in place
and will continue to be based in Bedford,
Texas.
Advisors
Sidley Austin LLP is serving as legal counsel
to Markel. Evercore is serving as exclusive financial advisor to
State National and Skadden, Arps, Slate, Meagher & Flom LLP is
serving as legal counsel to State National.
About Markel
Markel Corporation is a diverse financial
holding company serving a variety of niche markets. The Company's
principal business markets and underwrites specialty insurance
products. In each of the Company's businesses, it seeks to provide
quality products and excellent customer service so that it can be a
market leader. The financial goals of the Company are to earn
consistent underwriting and operating profits and superior
investment returns to build shareholder value. Visit Markel
Corporation on the web at www.markelcorp.com.
About State National Companies, Inc.
State National
Companies, Inc. (NASDAQ: SNC) is a leading specialty provider of
property and casualty insurance services operating in two niche
markets across the United States.
In its Lender Services segment, the Company specializes in
providing collateral protection insurance, which insures personal
automobiles and other vehicles held as collateral for loans made by
credit unions, banks and specialty finance companies. In its
Program Services segment, the Company leverages its "A" (Excellent)
A.M. Best rating, expansive licenses and reputation to provide
access to the U.S. property and casualty insurance market in
exchange for ceding fees. To learn more, please visit
www.statenational.com. State National routinely posts important
Company information on its website.
Cautionary note regarding forward-looking
statements
Some of the statements in this press release may
include forward-looking statements which reflect our current views
with respect to future events and financial performance, and State
National may make related oral, forward-looking statements on or
following the date hereof. Such statements may include
forward-looking statements both with respect to us in general and
the insurance sector specifically, both as to underwriting and
investment matters. These statements may also include
assumptions about our proposed acquisition by Markel (including its
benefits, results, effects and timing). Statements which
include the words "should," "would," "expect," "intend," "plan,"
"believe," "project," "anticipate," "seek," "will," and similar
statements of a future or forward-looking nature identify
forward-looking statements in this material for purposes of the
U.S. federal securities laws or otherwise. We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in the Private Securities
Litigation Reform Act of 1995.
The proposed transaction is subject to risks and uncertainties,
including: (A) that State National and Markel may be unable to
complete the proposed transaction because, among other reasons,
conditions to the closing of the proposed transaction may not be
satisfied or waived; (B) uncertainty as to the timing of completion
of the proposed transaction; (C) the inability to complete the
proposed transaction due to the failure to obtain State National
stockholder approval for the proposed transaction or the failure to
satisfy other conditions to completion of the proposed transaction,
including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the transaction; (D) the
exercise of appraisal rights by State National stockholders, which
could permit Markel to terminate the Merger Agreement even if State
National stockholder approval has been obtained; (E) the occurrence
of any event, change or other circumstances that could give rise to
the termination of the merger agreement; (F) risks related to
disruption of management's attention from State National's ongoing
business operations due to the proposed transaction; (G) the effect
of the announcement of the proposed transaction on State National's
relationships with its clients, operating results and business
generally; (H) the outcome of any legal proceedings to the extent
initiated against State National, Markel or others following the
announcement of the proposed transaction; (I) risks related to
Markel's post-closing integration of State National's business and
operations; (J) risks related to a downgrading of State National's
or Markel's A.M. Best ratings or other similar financial strength
or debt ratings as a result of the announcement or completion of
the proposed transaction; and (K) the loss or impairment of State
National's material client or other relationships as a result of
the announcement or completion of the proposed transaction, as well
as State National's and Markel's management's response to any of
the aforementioned factors.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein and elsewhere,
including the risk factors included in State National's most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q and
other documents of State National on file with the SEC. Any
forward-looking statements made in this material are qualified by
these cautionary statements, and there can be no assurance that the
actual results or developments anticipated by State National will
be realized or, even if substantially realized, that they will have
the expected consequences to, or effects on, State National or its
business or operations. Except as required by law, the
parties undertake no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Additional information about the proposed transaction and
where to find it
In connection with the proposed
transaction, State National will file with the SEC a proxy
statement on Schedule 14A and may file or furnish other documents
with the SEC regarding the proposed transaction. This press
release is not a substitute for the proxy statement or any other
document which State National may file with the SEC.
INVESTORS IN AND SECURITY HOLDERS OF STATE NATIONAL ARE URGED TO
READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE
FILED OR FURNISHED OR WILL BE FILED OR WILL BE FURNISHED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
RELATED MATTERS. Investors and security holders may obtain
free copies of the proxy statement (when available) and other
documents filed with or furnished to the SEC by State National
through the web site maintained by the SEC at www.sec.gov or by
contacting the investor relations department of State National:
Investor Relations
State National Companies, Inc.
1900 L. Don Dodson Drive
Bedford, Texas 76021
Attn: Corporate Secretary
Participants in the solicitation
State National and
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from State National's
stockholders in connection with the proposed transaction.
Information regarding State National's directors and executive
officers, including a description of their direct interests, by
security holdings or otherwise, is contained in State National's
annual proxy statement filed with the SEC on April 7, 2017. A more complete description
will be available in the proxy statement on Schedule 14A that will
be filed in connection with the proposed transaction. You may
obtain free copies of these documents as described in the preceding
paragraph filed, with or furnished to the SEC. All such
documents, when filed or furnished, are available free of charge at
the SEC's website (www.sec.gov) or by directing a request to State
National at the Investor Relations contact above.
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