(Bloomberg) -- Kemper Corp., the insurer formerly known as Unitrin, agreed to buy Alliance United Group to add sales of auto coverage in California, the biggest U.S. state by population.
Kemper will pay about $70 million in cash, the Chicago- based company said today in a statement distributed by Business Wire. The buyer plans to contribute as much as $75 million of capital to support the business after the completion of the deal, which is expected in the first half of next year.
Chief Executive Officer Donald G. Southwell, whose company also sells home insurance and life coverage, is working to bolster a private-passenger auto operation that endured a decline in premium revenue this year. Kemper said Alliance is among the top five insurers in California’s non-standard auto market, which covers risky drivers.
“This acquisition is a great addition to Kemper’s strong personal-lines insurance businesses and increases our capabilities to serve the non-standard private passenger auto market,” Southwell said in the statement.
Kemper advanced 1.2 percent to $36.12 at 10:14 a.m. in New York, narrowing its decline for the year to 12 percent.
Kemper’s legal adviser is Foley & Lardner LLP. Sherman & Co. is the banker for Alliance, with Sidley Austin LLP providing legal advice.
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