Kemper to acquire American Access in $370 million transaction
Kemper announced that it has entered into a definitive agreement to acquire American Access Casualty Company and its related captive insurance agency, Newins Insurance Agency, and its subsidiaries (collectively “AAC”), in a cash transaction valued at $370 million. The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and other customary closing conditions.
AAC, headquartered in Downers Grove, Illinois, provides specialty private passenger auto insurance in Arizona, Illinois, Indiana, Nevada and Texas. AAC wrote over $370 million of direct premiums in 2019 through a network of approximately 500 independent agents and over 110 captive agents. AAC’s multi-channel distribution strategy, agency relationships, and deep ties to the markets it serves—particularly Hispanic communities—have driven strong growth and consistent profitability.
“AAC is a great addition to Kemper’s specialty auto franchise and aligns with our strategic intent to serve growing niche markets with affordable and easy-to-use products. Their distribution capabilities, including strong customer and agent relationships, will expand our geographic footprint and when combined with our financial resources will create increased reach and incremental scale. We look forward to having AAC join the Kemper team.” President of Kemper’s P&C Division, Duane Sanders.
The transaction is expected to be accretive to Kemper’s earnings per share (EPS) and return on tangible common equity in the first year, excluding value of business acquired and one-time items, and result in high single-digit EPS accretion in the second year, excluding restructuring and one-time items. Tangible book value per share is expected to return to pre-transaction levels within the first year following the close of the transaction.
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