National Interstate to Acquire Vanliner Insurance Company

ST. LOUIS, April 26 /PRNewswire/ -- UniGroup, Inc. has reached a definitive agreement to sell its subsidiary, Vanliner Insurance Company to National Interstate Insurance Company, a Richfield, Ohio based specialty property and casualty insurance provider. National Interstate Insurance Company is the principal subsidiary of National Interstate Corporation (Nasdaq: NATL). Vanliner, which is headquartered in suburban St. Louis, is a market leader in providing insurance for the moving and storage industry.

The sale has been approved by the Board of Directors of all involved parties. The deal, which is subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of 2010.

Under the agreement, National Interstate will pay approximately $125-$135 million in cash, which represents Vanliner's tangible book value at closing. The purchase price may be adjusted after closing based on Vanliner's final closing date balance sheet. As part of the definitive agreement, UniGroup has agreed to provide National Interstate with comprehensive financial guarantees related to the runoff of Vanliner's balance sheet following the close. While providing comprehensive financial guarantees to National Interstate, the financial guarantees also provide that favorable development of the closing balance sheet, for example, settlement of insured losses at amounts less than provided for on the closing balance sheet, will benefit UniGroup. Vanliner wrote approximately $104 million of gross moving and storage premiums in 2009, representing 58% of its total business.

At the closing, National Interstate and UniGroup will enter into a five-year agreement whereby Vanliner will remain the exclusively endorsed insurance provider for UniGroup's affiliated Mayflower Transit and United Van Lines moving and storage agents. Vanliner will continue to operate from its current offices.

Richard H. McClure, President of UniGroup said, "The sale of Vanliner is the result of a comprehensive strategic review of UniGroup and its various businesses. As a part of National Interstate, Vanliner, its customers and its employees will have even greater opportunities for growth in the future. Similarly, the capital provided by the transaction will support the future growth of UniGroup and its network of United Van Lines and Mayflower Transit agents across the U.S."

"We established Vanliner as an industry leader by providing specialized insurance for movers and we are confident that National Interstate, with its financial resources and proven results as a specialty insurer, will maintain and strengthen Vanliner's quality standards, high levels of customer service and strong reputation," McClure said.

Dave Michelson, President and Chief Executive Officer of National Interstate said, "We have been looking at potential acquisitions for some time. We feel that Vanliner is an obvious extension of our successful specialty niche business model and the moving and storage business complements our existing insurance products. Combining Vanliner's expertise in the moving and storage industry with National Interstate's proven underwriting and claims skills will help ensure continued profitable growth for the business."

Michelson added, "We saw both a business and cultural fit between our organizations. At National Interstate we have always focused our efforts on providing unique and specialized insurance solutions and service for our customers. We are excited about this opportunity to build on the success that Vanliner has enjoyed using an approach that is very consistent with ours."

Macquarie Capital acted as financial advisor to UniGroup on the transaction.

About Vanliner: Vanliner Insurance Company is headquartered in Fenton, Mo., a suburb of St. Louis. The company was formed in 1978 and is licensed in all 50 states to provide an insurance solution to affiliated moving and storage agents of its parent, UniGroup, Inc. In the mid 1990's, Vanliner began offering coverages to non- affiliated agents and today is one of the premier providers of insurance products for the moving and storage industry.

About National Interstate: National Interstate Corporation (NASDAQ: NATL), founded in 1989, is a specialty property and casualty insurance holding company with a niche orientation and focus on the transportation industry. We differentiate ourselves by offering insurance products and services designed to meet the unique needs of targeted insurance buyers. Our products include insurance for transportation companies, alternative risk transfer, or captive insurance programs for commercial risks, specialty personal lines consisting of insurance products focused primarily on recreational vehicle owners and small commercial vehicle accounts, and transportation and general commercial insurance in Hawaii and Alaska. We offer our insurance products through multiple distribution channels including independent agents and brokers, affiliated agencies and agent Internet initiatives. Our insurance subsidiaries are rated "A" (Excellent) by A.M. Best Company. Headquartered in Richfield, Ohio, National Interstate is an independently operated subsidiary of Great American Insurance Company, a property and casualty subsidiary of American Financial Group, Inc. (NYSE/Nasdaq: AFG).

SOURCE UniGroup, Inc.