June 27, 2007
Exhibit
99.1
|
Xxxxxxx
X. Xxxx
President
and Chief Executive Officer
000-000-0000
xxxxx@XxxxxxxxxxxxxXxxxxx.xxx
|
June
27,
2007
Dear
Professionals Direct Shareholder:
On
June
25, 2007, Professionals Direct, Inc. executed a merger agreement under which
it
agreed to be acquired by The Hanover Insurance Group, Inc. of Worcester,
Massachusetts (NYSE: THG). The purchase price is $23.2 million, or
$69.61 per share, payable in cash after closing of the merger. The
closing is subject to a variety of conditions, including approval by you as
shareholders and approval by the Michigan insurance regulators. If
the merger is approved, I expect that the closing will occur in late third
or
early fourth quarter of 2007.
Attached
is a copy of the press release regarding the merger that Hanover issued after
the close of business on Monday, June 25. Some of you may have
already seen the release on the electronic news services. We have
filed a copy of the merger agreement with the SEC on Form 8-K, which is
available on the SEC’s website at xxxx://xxx.xxx.xxx.
We
anticipate holding a meeting of our shareholders in the third quarter to
consider and approve the merger with Hanover. In connection with that
meeting, a proxy statement for our shareholders and other materials will be
filed with the SEC. Shareholders and other interested parties will be
able to obtain free copies of the proxy statement (when available) as well
as
other documents filed with the SEC that contain information about Professionals
Direct, Inc. on the SEC’s website noted above. Free copies of the SEC
filings are also available from Professionals Direct, Inc., 0000 Xxxxxxx Xxxx,
X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000, Attention: Investor Relations.
Professionals
Direct, Inc. and its executive officers, directors, other members of management,
employees and Hanover may be deemed, under SEC rules, to be participants in
the
solicitation of proxies from Professionals Direct’s shareholders with respect to
the proposed merger. Information regarding the executive officers and directors
of Professionals Direct is set forth in its Form 10-KSB for the year ended
December 31, 2006, which was filed with the SEC on March 30, 2007, and its
quarterly report on Form 10-QSB and current reports on Form 8-K as subsequently
filed with the SEC. More detailed information regarding the identity
of potential participants, and their direct or indirect interests, by securities
holdings or otherwise, will be set forth in the proxy statement and other
materials to be filed with the SEC in connection with the proposed
merger.
If
you
have questions about the process, then please call Xxxxxxx Xxxxxxxxx at
000-000-0000 or me.
Sincerely,
Xxxxxxx
X. Xxxx
0000
Xxxxxxx Xx. SE, Grand Rapids,
MI 49546-6495 * p.
000-000-0000 * f.
000-000-0000 * xxx.XxxxxxxxxxxxxXxxxxx.xxx
Shareholders
Professionals
Direct, Inc.
June
27, 2007
Note
Regarding Forward-Looking Statements
Statements
included in this letter that are not historical facts are forward-looking
statements within the meaning of the federal securities laws, including the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include statements regarding expectations as to the completion of
the
merger and the other transactions contemplated by the merger agreement. The
forward-looking statements contained in this letter involve risks and
uncertainties that could cause actual results to differ materially from those
referred to in a forward-looking statement. These risks include, but are not
limited to, the ability of the parties to the merger agreement to satisfy the
conditions to closing specified in the merger agreement. More information about
Professionals Direct, Inc. and other risks related to the company are detailed
in the company’s most recent annual report on Form 10-KSB for the year ended
December 31, 2006, and its quarterly report on Form 10-QSB and current reports
on Form 8-K as subsequently filed with the SEC. Professionals Direct,
Inc. does not undertake an obligation to update forward-looking
statements.
The
Hanover Insurance Group to
Acquire
Professional Liability Firm
-
|
Acquisition
expands The Hanover’s specialty lines
capabilities
|
-
|
Delivers
on company’s promise to help its agent partners grow their
businesses
|
WORCESTER,
Mass. (June 25, 2007) – The Hanover Insurance Group, Inc. (NYSE: THG) today
announced that it has entered into a definitive agreement through which it
will
acquire Professionals Direct, Inc. (OTCBB: PFLD) for $23.2 million.
Professionals
Direct is the Michigan-based holding company for the Professionals Direct
organization, a premier provider of professional liability insurance for small
and mid-sized law practices. Through its various subsidiaries, the company
generates annual written premium of approximately $30 million. Professionals
Direct is rated “A-” (Excellent) by A.M. Best Company.
The
transaction has been approved by the boards of directors of both companies,
and
is subject to regulatory reviews and approvals, as well as the approval of
Professionals Direct’s shareholders. It is expected to close in the fourth
quarter.
“We
are
very pleased to have the opportunity to add Professionals Direct and its
specialized capability to our organization,” said Xxxxxxxxx X. Xxxxxxxx, chief
executive officer of The Hanover Insurance Group. “This transaction will enable
us to broaden our product and service capabilities and to further strengthen
our
competitive position, delivering even greater value to our agent partners and
our shareholders.”
“We
have
made tremendous investments in our business over the past nearly four years,
positioning our company to be the best partner for winning independent agents
in
our markets,” Xxxxxxxx said. “Today, we offer our agent partners a wide range of
personal and commercial lines products, including a robust specialty insurance
portfolio that is unique for a company of our size. With the addition of
Professionals Direct, we will once again expand our specialty capabilities,
helping our agent partners meet more of their customers’ needs and grow their
businesses.”
For
Professionals Direct, the transaction represents an opportunity to meaningfully
grow its business and its presence in the lawyers professional liability
market.
“We
are
very pleased to be joining The Hanover organization,” said Xxxxxxx Xxxx, chief
executive officer of Professionals Direct. “We are proud of what we have
achieved as an independent company, establishing Professionals Direct as a
successful and highly-regarded provider of lawyers professional liability
insurance.”
“Given
our product and underwriting expertise, we are excited to have the opportunity
to leverage The Hanover’s experience, resources, and independent agency network
to take our franchise to the next level,” Xxxx said. “We have every confidence
we will continue to grow our business and add value to The Hanover and its
agent
partners.”
Xxxxx
Xxxxx & Co. acted as exclusive financial advisor to Professionals Direct in
the transaction.
About
The
Hanover
The
Hanover Insurance Group, Inc. (NYSE: THG), based in Worcester, Mass., is
the
holding company for a group of insurers that includes The Hanover Insurance
Company, also based in Worcester; Citizens Insurance Company of America,
headquartered in Howell, Mich., and their affiliates. The Hanover offers
a wide
range of property and casualty products and services to individuals, families
and businesses through an extensive network of independent agents, and has
been
meeting its obligations to its agent partners and their customers for more
than
150 years. Taken as a group, The Hanover ranks among the top 35 property
and
casualty insurers in the United States.
About
Professionals Direct
Professionals
Direct, Inc. (OTCBB: PFLD), based in Grand Rapids, Michigan is the holding
company for a Professionals Direct Insurance Services and Professionals Direct
Insurance Company. Professionals Direct provides lawyers professionals
liability insurance in more in 36 states through its various programs and
through various independent producers. Founded in 1987 as Michigan
Lawyers Mutual Insurance Company, Professionals Direct reorganized in 2001
as a
stock organization and expanded to achieve a national presence in its
professional liability niche.