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Bedford’s State National to be acquired by Richmond’s Markel for $919M

Richmond, Virginia based-Markel Corporation is acquiring Bedford-based State National Companies Inc. through an approximately $919 million transaction. The companies announced the agreement July 26. Markel will purchase all outstanding shares of State National stock for $21 per share, in on-hand company cash.

Sidley Austin LLP is representing Markel’s legal counsel, with Skadden, Arps, Slate, Meagher & Flom LLP representing State National. Additionally, Evercore will serve as to State National’s exclusive financial advisor.

Markel is a worldwide insurance, reinsurance and investment operations holding company and State National Companies Inc. is a nationwide niche property and casualty insurance provider.

Though it is being acquired by Markel, State National will continue to operate as a separate unit after the deal is completed. Additionally, the company’s the current management team will remain in place, and the company will continue to be based in Bedford.

State National is the largest and U.S. insurance fronting business with approximately $1.3 billion in gross written premium (2016) and more than 60 programs, and the negotiation with Markel will bring the companies together with their “shared commitment to innovation, service and long-term relationships,” the news release reads.

“We are excited to be joining forces with State National—an industry leader with a talented management team that has delivered exceptional long-term results,” Richard R. Whitt, Markel’s co-CEO said in the release. “Combining Markel’s financial strength with State National’s unique business model and proven record of success, we are confident that all stakeholders will be well served moving forward.”

The transaction has already been unanimously approved by both companies’ board of directors, but still needs to be approved by a majority of State National’s shareholders and state insurance regulators.

Following those approvals and all necessary closing conditions, the agreement is expected to close in the fourth quarter of 2017.

Thus far, about 37 percent of State National’s common stock is committed to voting in favor of the transaction, following members of the Ledbetter family and CF SNC Investors LP entering into voting agreements with Markel.

“We believe this transaction with Markel is good for our employees and clients, as well as our shareholders,” Terry Ledbetter, State National’s chairman and CEO, said in the release. “This transaction is all about growth, not cost-cutting, and we believe that State National employees will benefit from being part of a larger, stronger, growth-oriented company with a more diversified platform.”

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