Guard Insurance Group of Wilkes-Barre has been sold to a unit of billionaire Warren Buffett‚??s company Berkshire Hathaway Inc.
Israel-based Clal Insurance Enterprises Holdings agreed Aug. 16 to sell the company to National Indemnity Co. of Nebraska, a unit of Berkshire Hathaway, for $221 million, according to a Clal Report to the Israeli stock exchange released by Guard Insurance on Friday. The sale also frees Clal from a $48 million bank-loan guarantee it promised Guard, bringing the total transaction value to $269 million.
That‚??s a significant increase in value over the reported $135 million Clal paid when it acquired Guard in 2007, but less than the $312 million Employers Holdings Inc., of Reno, Nev. offered for the company in August, 2011. Employers‚?? non-binding offer was later withdrawn.
Headquartered in Wilkes-Barre, Guard Insurance and associated companies were founded in 1982 by Judd and Susan Shoval, who continued in active management until selling to Clal.
Judd Shoval said he did not wish to comment on the sale or the company generally because he is no longer involved in the company‚??s management and did not want to interfere in the sale.
Guard Insurance, which specializes in small to medium-sized commercial property and casualty accounts, saw significant growth since its last acquisition. In 2005 the company reported having approximately 33,000 small business clients and 500 agents, and writing $207 million of premiums. Today it insures more than 62,000 employers and has approximately 700 agents. It wrote more than $300 million in insurance premiums in 2011, according to the company‚??s website.
Bill Moore, the head of the Greater Wilkes-Barre Chamber of Business and Industry, called Buffett‚??s acquisition of Guard a positive for the company and the region as a whole.
‚??What it shows is Guard is a very solid performer, with growth of about 40 percent over the last six years indicating what a good, well-managed company they are,‚?Ě Moore said. ‚??They‚??ve got about 300 employees in the area, and so that growth is very important for the area economy, because as a company prospers so does the economy, and as the employees benefit so does the local economy.‚?Ě
‚??Having an investor like Warren Buffett decide to partner with them and move into the region with them can be a very good thing for the region,‚?Ě he added. ‚??So that others on the outside are looking into the area at the strength of the businesses that are here.‚?Ě
Moore said he does not know what Berkshire Hathaway plans for the company or whether it is considering other local purchases, but said ‚??I do know that they typically don‚??t close down and move companies out.‚?Ě
‚??That‚??s not their pattern, so it bodes well for the region,‚?Ě he said.
Guard spokesman Bob Thomas, company executives and National Indemnity Co. spokeswoman Janelle Kay would not comment on the sale Friday.
The sale is expected to close by December 15, according to the stock exchange report. The deal is subject to regulatory approval by the Insurance Commissioner of the State of Pennsylvania and antitrust authorities.