Progressive (PGR) To Acquire Protective Insurance (PTVCA) (PTVCB) For About $338 Million

By Amit Chowdhry ● February 16, 2021
  • The Progressive Corporation (NYSE: PGR) announced it is buying Protective Insurance Corporation (NASDAQ: PTVCA) (NASDAQ: PTVCB) for $338 million. These are the details.

The Progressive Corporation (NYSE: PGR) and Protective Insurance Corporation (NASDAQ: PTVCA) (NASDAQ: PTVCB) have announced that they have entered into a definitive agreement under which Progressive has agreed to acquire all of the outstanding Class A and Class B common shares of Protective for $23.30 per share in cash for a total transaction value of approximately $338 million.

This acquisition is expected to close prior to the end of the third quarter of 2021, subject to customary closing conditions, including receipt of certain required regulatory approvals and approval of Protective’s Class A shareholders.

Protective’s Board of Directors unanimously approved the transaction, based on the unanimous recommendation of the Special Committee of the Board. And certain Protective shareholders owning approximately 35% of Protective’s outstanding Class A common stock that had previously entered into a contingent sale agreement terminated their obligations to close the transactions under that agreement and entered into a voting agreement with Protective and Progressive in support of the sale to Progressive.

Upon the completion of the deal, Protective shareholders will receive $23.30 per share in cash from Progressive. And Progressive will fund the purchase through liquid investments on hand. The per share price represents a 49.1% premium and 63.2% premium, respectively, to Protective’s unaffected 30-day volume-weighted average Class A and Class B share prices as measured on February 12, 2021.

And Progressive plans to maintain Protective’s offices in Carmel, Indiana and retain Protective’s employees.

KEY QUOTES:

“As a leader in commercial auto insurance, we’re excited to expand our capabilities with the expertise Protective offers in larger fleet and affinity programs and by providing additional product lines for us to add to our portfolio. Our Commercial Lines business provides one of our greatest opportunities to expand our addressable market and grow. This move allows us to add products that will help us support larger fleets and brings expertise in workers’ compensation coverage for the transportation industry, which are new areas of business for us and can help us to meet the needs of our commercial customers. We look forward to working with the employees of Protective and appreciate the knowledge they bring.”

— Commercial Lines President, Karen Bailo

“The Special Committee of the Board has been focused on what is in the best interest of Protective and its stakeholders and we are pleased to achieve that objective. This transaction aligns well with the direction of Protective, provides stability and opportunity for growth and will deliver a significant, immediate cash premium to Protective’s shareholders—all of which the Special Committee and the Board believe creates the ideal outcome for Protective. The Board would also like to recognize the Shapiro family for its over 40-year stewardship of Protective.”

— John D. Nichols, Jr., Chair of the Special Committee of Protective’s Board

“We are excited to announce this agreement with Progressive, which is a milestone in Protective’s history. With Progressive’s scale and resources, we expect to deliver greater value to our policyholders, while continuing to provide the exceptional service they have come to expect from us. Progressive shares our commitment to excellence in serving customers, and we are confident they are the ideal owner for Protective. Together, we will be able to deliver innovative offerings and superior customer service to even more customers across the country.”

“This transaction is truly a testament to the hard work and dedication of our talented team. By combining with Progressive, we expect Protective and its employees will have greater opportunities to grow as part of a larger and more diversified organization.”

— Jeremy Johnson, Protective’s Chief Executive Officer

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