State Farm to acquire GAINSCO in its first-ever acquisition

Posted on September 17, 2020

By HOI ABC

BLOOMINGTON – Bloomington-based State Farm is entering into an agreement with GAINSCO, Inc. to acquire the Texas-based company for approximately $400 million in cash.

According to both companies, the transaction is expected to close in early 2021, subject to approval by GAINSCO shareholders, obtaining regulatory approvals and other customary closing conditions.

This marks the first acquisition of an insurance company by State Farm in its 98-year history, according to our news partner HOI ABC.

“We believe this acquisition positions both our company and GAINSCO well for future growth,” said Michael Tipsord, State Farm President, Chairman, and CEO. “Because of our competitive value, broad line of products, and exceptional customer service from our employees and 19,200 State Farm independent contractor agents, customers have made us the largest property and casualty insurer for several decades.”

According to the release, under the definitive merger agreement, upon closing State Farm Mutual will acquire 100% of the stock in GAINSCO, Inc., the holding company of MGA Insurance Company, Inc., a Texas-domiciled insurance company, and GAINSCO shareholders will receive approximately $107.38 per share in cash. GAINSCO will continue to operate as a separate company and brand with continued focus on its current objectives.

“This transaction creates value for GAINSCO’s shareholders and is especially opportunistic for our GAINSCO team, agency base, policyholders and plans for future growth.” said GAINSCO Executive Chairman Bob Stallings. “GAINSCO is a leading provider of non-standard auto insurance products in the markets we serve and we look forward to partnering with State Farm, its agent network and our existing agency channels to achieve our mission of becoming a nationwide leader in the fastest growing segment of the auto insurance market.”

Over time, the parties expect to provide State Farm agents the opportunity to distribute GAINSCO products in addition to State Farm products and services.

WJBC News can be reached at [email protected]

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