Progressive acquiring trucking-focused insurer in $338M deal

Progressive Corp. agreed to acquire all of the outstanding class A and class B common shares of Protective Insurance Corp. for $23.30 per share in cash, for a total transaction value of roughly $338 million.

Progressive will fund the purchase through liquid investments on hand. The acquisition is expected to close prior to the end of the third quarter, subject to customary closing conditions, including receipt of certain required regulatory approvals and approval of Protective's class A shareholders.

"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," Karen Bailo, Progressive's commercial lines president, said.

Protective's board of directors unanimously approved the transaction. Protective shareholders owning approximately 35% of the target's outstanding class A common shares that previously entered into a contingent sale agreement terminated their obligations to close the transactions under that agreement and have agreed to support the sale to Progressive.

Progressive plans to keep Protective's offices in Carmel, Ind., and retain its employees.

The agreement contains a "no-shop" provision pursuant to which Protective Insurance is prohibited from soliciting, discussing or negotiating alternative acquisition proposals from third parties, subject to certain customary exceptions to permit the board to comply with its fiduciary duties under Indiana Law. Under limited circumstances, Protective Insurance would be required to pay a termination fee of $13.3 million to Progressive.

Protective Insurance serves as the publicly traded holding company for several property and casualty insurance subsidiaries including Protective Insurance Co., Sagamore Insurance Co. and Protective Specialty Insurance Co. Through its subsidiaries, Protective Insurance provides liabilities and workers' compensation coverage for trucking and public transportation fleets, along with trucking industry independent contractors.

Baker & Hostetler LLP is serving as legal adviser to Progressive. Piper Sandler & Co. is serving as financial adviser to Protective, while Skadden Arps Slate Meagher & Flom LLP is acting as legal adviser.