Mid-Hudson Co-Operative Insurance Co. in Montgomery, New York has signed a securities purchase agreement to acquire Hanover Fire Holdings, Inc. of King of Prussia, Pennsylvania.
According to AM Best, the acquisition will be financed by $4.0 million in cash and a $3.5 million bank loan whose terms and conditions are still in negotiation.
The acquisition is expected to be completed at the end of the first quarter of 2026 subject to regulatory review and approval. The transaction is subject to regulatory approvals from Pennsylvania and New York.
The agreement is between Mid-Hudson Co-Operative Insurance Co., an advance premium mutual property/casualty insurance company, and Hanover Fire Holdings, Inc., which owns all of the issued and outstanding shares of common stock of Hanover Fire & Casualty Insurance Co.
Mid-Hudson is the lead operating company within Mid-Hudson Group (MHG). Mid-Hudson is a predominantly New York State property carrier looking to expand its geographical footprint, as the Hanover acquisition provides access to additional states.
Following the acquisition, MHG has the potential to add new products, pricing flexibility, and greater geographic diversification of premium sources, AM Best said.
AM Best commented that the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Mid-Hudson Co-Operative Insurance Co., remain unchanged following the signing of the agreement.
The credit ratings reflect MHG’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management, AM Best said.
Although debt leverage will increase for the group, it is within an acceptable range of AM Best guidelines. Further, with this acquisition, risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is expected to remain at a level that supports the consolidated group, the ratings agency said.
Hanover writes predominantly personal property lines of business including fire and other liability, burglary/theft, allied lines and homeowners and will be owned by Mid-Hudson.
AM Best has placed under review with negative implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Hanover Fire & Casualty Insurance.
AM Best said Hanover’s ratings will remain under review with negative implications pending approval by the regulatory bodies and AM Best’s evaluation of the integration and future business plans.
Topics
Mergers & Acquisitions
New York
Pennsylvania
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