Donegal Group Inc. Announces Completion of Sale of Donegal Financial Services Corporation
March 08 2019 - 5:00PM
Donegal Group Inc. (NASDAQ:DGICA) and (NASDAQ:DGICB) announced
today that Donegal Group Inc. (“DGI”) and Donegal Mutual Insurance
Company (“DMIC”) completed the sale of Donegal Financial Services
Corporation (“DFSC”) and its wholly owned subsidiary, Union
Community Bank, to Northwest Bancshares, Inc. (“Northwest”) for
approximately $85.8 million in a combination of cash and Northwest
common stock (NASDAQ: NWBI). Immediately prior to the closing of
the merger, DFSC paid a dividend of approximately $29.2 million to
DGI and DMIC. Thus, the total proceeds to DGI and DMIC were
approximately $115.0 million.
As the owner of 48.2% of DFSC’s common stock, DGI received a
dividend payment from DFSC of approximately $14.1 million and
consideration from Northwest of approximately $41.4 million. DGI
will record its share of DFSC’s net income through the closing date
as well as a gain from the sale of DFSC, net of transaction-related
expenses, for an estimated combined benefit of approximately $10.9
million, or approximately 39 cents per Class A share, in its
results of operations for the first quarter of 2019.
Kevin G. Burke, President and Chief Executive Officer of Donegal
Group Inc., commented, “We are pleased to complete the sale of our
banking business to Northwest, and we are focusing our full
attention on our core property and casualty insurance business. We
extend our best wishes to Northwest as they expand their business
in Lancaster County, Pennsylvania and beyond.”
Keefe, Bruyette, & Woods, Inc., a Stifel Company, served as
financial adviser to DMIC, who is the majority shareholder of DFSC,
and Duane Morris LLP served as legal counsel to DGI and DMIC, who
are DFSC's two shareholders. Ambassador Financial Group, Inc.
served as financial advisor, and Luse Gorman, PC served as legal
counsel to Northwest.
About the Company
Donegal Group Inc. is an insurance holding company whose
insurance subsidiaries offer personal and commercial property and
casualty lines of insurance in 22 Mid-Atlantic, Midwestern, New
England and Southern states. Donegal Mutual Insurance Company and
the insurance subsidiaries of Donegal Group Inc. conduct business
together as the Donegal Insurance Group. The Donegal Insurance
Group has an A.M. Best rating of A (Excellent).
The Company’s Class A common stock and Class B common stock
trade on NASDAQ under the symbols DGICA and DGICB, respectively.
The Company continues to seek opportunities for growth while
striving to achieve its longstanding goal of outperforming the
property and casualty insurance industry in terms of service,
profitability and book value growth.
For Further Information:Jeffrey D. Miller Executive Vice
President & Chief Financial OfficerPhone: (717)
426-1931E-mail: investors@donegalgroup.com
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