Donegal Group Inc. (NASDAQ:DGICA) Files An 8-K Other EventsItem 8.01. Other Events.
On June11, 2018, Donegal Group Inc. (“DGI”) and Donegal Mutual Insurance Company (“DMIC”) entered into an agreement and plan of merger whereby Northwest Bancshares, Inc. (“Northwest”) will acquire Donegal Financial Services Corporation (“DFSC”) and its wholly owned subsidiary, Union Community Bank, for approximately $85.0million in a combination of cash and Northwest common stock. Immediately prior to the closing of the merger, DFSC will pay a dividend of approximately $30.0million to DGI and DMIC. Thus, DGI and DMIC will receive approximately $115.0million from the merger and the dividend.
Under the terms of the agreement, payment will be 50% cash and 50% stock, with the stock portion consisting of a fixed exchange of 137.84 Northwest shares for each of DFSC’s 17,864 outstanding shares. The exchange ratio was based upon the average per share closing price of Northwest’s stock for the ten trading days ended June4, 2018, which was $17.26. The agreement provides that the exchange ratio will switch to a floating basis if the value of Northwest’s shares during a period ending the fifth trading day prior to closing is less than $15.53 or greater than $18.99, in an effort to provide protection to both parties such that the total purchase price shall not be less than $80.75million or more than $89.25million. Northwest also has the right to alter the mix of cash and stock to be received if the value of Northwest’s shares during the calculation period is less than $15.53.
As the owner of 48.2% of DFSC’s common stock, DGI will receive a dividend payment from DFSC of approximately $14.5million and consideration from Northwest that will range in value from $38.9million to $43.0million. DGI anticipates that it will realize an after-tax gain, net of transaction-related expenses, within a range of $8.9million and $12.5million, or approximately $.32 to $.45 per ClassA common share, upon closing of the transaction. Subject to receipt of various regulatory approvals and satisfaction of other customary closing conditions, the parties anticipate that the dividend will be paid and the merger will close during the first quarter of 2019.
DGI issued a press release on June12, 2018, which DGI files as an exhibit to this Form 8-K Report and which DGI incorporates by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
DONEGAL GROUP INC ExhibitEX-99.1 2 d601517dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 DONEGAL GROUP INC. ANNOUNCES SALE OF DONEGAL FINANCIAL SERVICES CORPORATION For Further Information: Jeffrey D. Miller Executive Vice President & Chief Financial Officer Phone: (717) 426-1931 E-mail: [email protected] For Immediate Release MARIETTA,…To view the full exhibit click here
About Donegal Group Inc. (NASDAQ:DGICA)
Donegal Group Inc. (DGI) is an insurance holding company whose insurance subsidiaries offer personal and commercial lines of property and casualty insurance to businesses and individuals in over 21 Mid-Atlantic, Midwestern, New England and Southern states. The Company has four segments, which consist of its investment function, its personal lines of insurance, its commercial lines of insurance and its investment in Donegal Financial Services Corporation (DFSC). The Company primarily operates through two segments: personal lines of insurance and commercial lines of insurance. The personal lines of insurance, which its insurance subsidiaries write consists primarily of private passenger automobile and homeowners insurance. The commercial lines of insurance, which its insurance subsidiaries write consists primarily of commercial automobile, commercial multi-peril and workers’ compensation insurance. It holds interests in DFSC, which is a unitary savings and loan holding company.
