McDermott Represents NORCAL Mutual Insurance Company in Its Sale to ProAssurance Corporation
Deal Description: NORCAL Mutual Insurance Company (“NORCAL”), a California mutual insurance company providing medical professional liability insurance, risk management solutions and provider wellness resources to physicians, healthcare extenders, medical groups, hospitals, community clinics, and allied healthcare facilities throughout the United States, in connection with its demutualization and sale to ProAssurance Corporation (“PRA”), a publicly-traded professional liability insurance company (NYSE: PRA). The combined companies are expected to create the nation’s third largest medical professional liability insurance carrier. The transaction is structured as a sponsored demutualization pursuant to which policyholders of NORCAL will be entitled to receive common stock in NORCAL in exchange for the cancellation of their membership interests and to sell the common stock to PRA pursuant to a tender offer. Under the terms of the transaction, PRA will pay base consideration of $450 million in cash with additional contingent consideration of up to $150 million should ultimate loss estimates of NORCAL develop favorably.
The closing of the demutualization and the tender offer are mutually contingent.
The transaction was announced on February 20, 2020 and is subject to the receipt of approvals from NORCAL policyholders and applicable state and federal regulators, including the California Department of Insurance.
McDermott represented: NORCAL Mutual Insurance Company (“NORCAL”)
Regulatory counsel:Mayer Brown
Value: $450 million in cash with additional contingent consideration of up to $150 million
Financial advisors to NORCAL: Waller Helms Advisors
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