UPDATE 1-National Interstate agrees to buy Vanliner Insurance

Mon Apr 26, 2010 6:10pm EDT

* To buy Vanliner for between $125 mln-$135 mln

* Deal not to affect '10 profits, to add to '11 earnings

April 26 (Reuters) - National Interstate Corp (NATL.O) said its principal insurance subsidiary, National Interstate Insurance Co, agreed to buy Vanliner Insurance Co, for which it will pay between $125 million and $135 million in cash.

National Interstate does not expect the transaction to have a material effect on profits in 2010, but sees the deal adding to earnings beginning in 2011, the company said in a statement.

The deal value of $125 million to $135 million represents Vanliner's -- a unit of UniGroup Inc -- tangible book value at closing and the final value may be adjusted after closing based on Vanliner's closing date balance sheet, the company said.

UniGroup has agreed to provide National Interstate with comprehensive financial guarantees related to the runoff of Vanliner's balance sheet following the close, the company said.

The acquisition is expected to close in the second quarter.

National Interstate Corp is a unit of Great American Insurance Co, a property and casualty subsidiary of American Financial Group Inc (AFG.N).

National Interstate's shares closed at $20.48 Monday on Nasdaq.

(Reporting by Brenton Cordeiro in Bangalore; Editing by Savio D'Souza)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.