Fitch affirms Progressive on acquisition news

Fitch Ratings said it affirmed the Progressive Corp.’s issuer default rating of A+, senior debt ratings of A and junior debt rating of BBB+.

The outlook is stable.

The affirmation follows news that Progressive entered into an agreement to acquire a controlling interest in ARX Holding Corp., the parent company of American Strategic Insurance, for total consideration of $875 million in cash, a price that represents about 2.6 times book value, Fitch said.

The transaction would bring Progressive’s ownership interest in ARX to 67% from its current 5% stake in the company, which it acquired in 2012, the agency said.

The transaction is expected to close by April 1, 2015, subject to closing conditions, the agency said.

Progressive is expected to use ARX to enhance product offerings that include bundled personal auto and homeowners’ policies, which have historically been a limited segment for the company, but could become a larger portion of Progressive’s business mix.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.