One of the insurance sector's big names has signed an agreement to acquire the parent of the Permanent General Cos. for $239 million.
Madison, Wis.-based American Family said it expects to close on its purchase of PGC Holdings from private-equity firm Capital Z before the end of the year. Capital Z, which is based in New York, bought PGC in December 2004. Permanent General and sister company The General — yep, the one with those ads — focus in 25 states on drivers who don't qualify for coverage from standard carriers. The company booked $270 million worth of premiums in 2011.
Jack Salzwedel, American Family's chairman and CEO, said he and his senior team intend to keep intact PGC's brands and its leadership team under CEO Randy Parker. They also said Permanent General's 400 headquarters and 350 other employees will stay on and that they hope to adopt direct-sales strategies from the local companies.
"American Family Insurance will grow by reaching out to customers in new states and new markets, and also by strengthening our appeal to customers in our existing states," Salzwedel said. "This acquisition expands our holdings to include a company with different capabilities that also operates in some states we don't currently serve. It also provides American Family an opportunity to learn from a company with successful experience in direct insurance sales."
American Family writes more than $5 billion worth of premiums a year, the vast majority of it via 3,500 exclusive agents. It does not yet have a Tennessee presence.
"It is a bittersweet day for the Cap Z family," said Brad Cooper, managing partner of Capital Z Partners. "While we are happy with the outcome of the investment, we are sad to put an end to this eight-year relationship. We partnered with Randy Parker and his incredible management team and built a top notch brand in the insurance space. We are very pleased that PGC is being acquired by a company with similar qualities, values and goals, which will help PGC continue to grow and succeed."