United Fire Group, Inc · NASDAQ:UFCS
United Fire — United Fire & Casualty — Merger or Acquisition (December 2010)
13 slides from United Fire's merger presentation, Dec 1, 2010
Slide 1: United Fire & Casualty Company To Acquire Mercer Insurance Group
UNITED FIRE & CASUALTY COMPANY To Acquire Mercer Insurance Group (December 1, 2010)
Slide 2: Conference Call to Discuss Transaction
Conference Call to Discuss Transaction On today's call from United Fire: News release and presentation available in the Investor Relations section of www.unitedfiregroup.com Investor section of www.mercerins.com Randy Ramlo, United Fire's president and CEO Mike Wilkins, United Fire's EVP, corporate
Slide 3: Forward-Looking Statements
Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This presentation and any other written or oral statements regarding United Fire & Casualty Company's acquisition of Mercer Insurance Group include certain forward
Slide 4: United Fire to acquire Mercer Insurance
United Fire to acquire Mercer Insurance All-cash transaction valued at approximately $191 million ($28.25 per share) Creates "top 50" U.S. publicly traded property casualty insurer, based on 2009 net written premiums of approximately $605 million 91% commercial lines/9% personal lines Combined compa
Slide 5: Mercer Insurance Overview
Mercer Insurance Overview Operates four insurance subsidiaries with premiums divided: 85% commercial lines ^ Small and medium-sized businesses in Arizona, California, Nevada, New Jersey, Oregon and Pennsylvania 15% personal lines ^ individuals in New Jersey (homeowners only) and Pennsylvania (homeow
Slide 6: Mercer Insurance Overview: Direct Written Premium
Mercer Insurance Overview Direct Written Premium (December 31, 2009) (CHART) (December 31, 2009) (December 31, 2009)
Slide 7: Transaction Details
Transaction Details Approved by United Fire and Mercer Insurance boards Valuation 0.99x of MIGP's stated book value at September 30, 2010 No or minimal goodwill anticipated Financing Available on-balance sheet capital: $100 million External financing: $125 million Existing credit line New debt facil
Slide 8: Foundation: Financial Strength
Foundation: Financial Strength Believe post-transaction balance sheet will support current A.M. Best rating of A (Excellent) Anticipate 15% debt-to-total capitalization ratio Assuming Mercer Insurance's outstanding indebtedness of approximately $18 million In total, adding about $125 million in debt
Slide 9: Foundation: More Diverse Risk Profile
Foundation: More Diverse Risk Profile Combined $605 million in 2009 NPW 24 significant states Approx. 1,400 independent agents = Top 18 UFCS States = Other UFCS states = Top 6 MIGP States Direct Written Premiums (2009) WV WA CO GA SC NC IL ID MT UT NM OK TN KY OH MI VA MD DE NY VT NH MA RI ME WY KS
Slide 10: Foundation: Common Business Approach
Foundation: Common Business Approach Conservative underwriting and investment cultures Market through independent agents Focus on customer service Commitment to fair claims handling Opportunity to integrate operations (longer-term) UFCS award-winning technology for agents Increased scale supports ef
Slide 11: Examples of Market Opportunities
Examples of Market Opportunities Mercer Insurance: Waste haulers program Religious institutions program Mail order surety program United Fire: Underwriting expertise including predictive modeling and CATography(tm) Surety Signature Premier Life insurance
Slide 12: Summary
Summary All-cash transaction valued at $191 million ($28.25 per share) Creates "top 50" U.S. publicly traded property casualty insurer, based on 2009 net written premiums of approximately $605 million Combined company will market through approximately 1,400 independent agents in 24 states Foundation
Slide 13: United Fire & Casualty Company To Acquire Mercer Insurance Group
UNITED FIRE & CASUALTY COMPANY To Acquire Mercer Insurance Group (December 1, 2010)
United Fire & Casualty — Merger or Acquisition (December 2010) on 6ix