Alfa Corp. to Acquire Vision Insurance Group

Alabama-based Alfa Corp. and the Vision Insurance Group L.L.C. announced a definitive agreement whereby Alfa Corp. will acquire Vision, a managing general agent writing new business in nine states. Alfa Corp. will purchase Vision for $20 million in cash and stock with an additional purchase consideration of up to $14 million based on future performance. The parties expect that the acquisition will close in January 2005.

Alfa views the acquisition as an opportunity to expand its personal lines business in new markets through Vision’s 2,500 independent agents. Alfa Corp. has formed an insurance subsidiary, Alfa Vision Insurance Corp., through which Vision will write its nonstandard automobile business. Vision currently operates in Texas, Missouri, Indiana, Ohio, Virginia, Tennessee, Arkansas, Kentucky, and Florida. Both Vision and Alfa Vision Insurance Corp. will be wholly owned subsidiaries of Alfa Corp. It is anticipated that Alfa Vision Insurance Corp. will participate in the pooling agreement with other companies in the Alfa Group.

Jerry A. Newby, CEO of Alfa Corp., said, “Vision will be an exciting addition to the Alfa family of companies. Alfa has the opportunity to increase its presence in the nonstandard automobile market and at the same time expand operations into nine new states. This transaction combines two great companies with similar operating cultures and an absolute focus on underwriting results. Nonstandard automobile insurance is one of the fastest growing segments in the insurance industry. I expect that Vision’s state-of-the-art technology, coupled with Alfa’s superior financial ratings, will make us very competitive in Vision’s markets. In addition, we see potential for future growth in other states.”

John Russell, president of Vision Insurance Group, said, “This is a great opportunity for our independent agents, our employees and the policyholders we serve. Alfa is among the strongest rated insurance companies in America. This financial strength will allow us to aggressively expand our business, and we are excited to contribute to Alfa’s future growth. Though Vision found an excellent partner in Alfa, I’m grateful for the support of our current carriers and look forward to continuing our relationships with them.”

Vision Insurance Group was founded in 1997 by Russell as a full-service managing general agency currently writing nonstandard automobile in nine states. The company is headquartered in Brentwood, Tenn., and provides all underwriting, claims, actuarial and financial services on behalf of its contracted carriers. Vision’s direct written premium for 2003 was approximately $62 million.

Alfa Corp. is a financial services holding company headquartered in Montgomery, Ala., and offers property and casualty insurance, life insurance and financial services products.

Topics Mergers & Acquisitions