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 INDIANAPOLIS, Aug. 26 /PRNewswire/ -- Acordia, Inc. (NYSE: ACO) announced today that it has signed a definitive agreement to acquire substantially all of the operations of the insurance brokerage firm American Business Insurance, Inc. (ABI). ABI is a subsidiary of Great American Insurance Company, which is a subsidiary of American Financial Corporation, a diversified financial services company. The seller will receive cash and Acordia common stock and common stock warrants, and Acordia will assume certain debt and liabilities. The total value of the consideration is approximately $130 million. The deal is expected to close in October of this year.
 "Several factors make this an important strategic move for Acordia," said L. Ben Lytle, chairman, president and chief executive officer of Acordia, the Indianapolis-based insurance broker.
 "First, we'll be increasing property and casualty brokerage and life insurance brokerage to approximately 43 percent of our revenues. During our initial public offering, we told investors that our goal was to achieve critical mass in property and casualty broking. With this acquisition, we will accomplish that goal," Lytle stated. In addition to being a broker of property and casualty and life insurance, Acordia is a broker and administrator of health insurance. Acordia had 1992 revenues of $207.2 million. The operations of ABI being acquired by Acordia have annualized revenues of approximately $116 million.
 "Second, ABI and Acordia share a commitment to serving mid-size companies (firms below the Fortune 1000) in mid-size cities," said Lytle. "Mid-size firms are an attractive market segment, and like Acordia, ABI has demonstrated that it understands and can meet the insurance-related needs of those companies." Acordia, which has 75 offices in 19 states, is strongest in the Midwest and the South. ABI is particularly strong in the Mid-Atlantic region and in the West. Forty- five ABI offices in 15 states will become part of Acordia.
 Lytle indicated that the third strategic factor is that Acordia and ABI are decentralized companies with highly autonomous operating units. "This is significant because it means that integration of the two companies should proceed smoothly," commented Lytle. Acordia has acquired and integrated other insurance brokerage firms in the last two years.
 According to Lytle, the fourth strategic aspect of the acquisition is that Acordia and ABI have experience with health care utilization review and managed health care, both of which are expected to be major elements of government health care reform initiatives. "Our employee benefits business is well positioned as the health care delivery and financing systems change," said Lytle.
 Acordia is a nationwide network of companies that provide insurance broking, administration and selected financial services. Unique among brokers, Acordia is structured to meet the needs of clients in specific geographic, demographic and industry markets. Acordia has been ranked the eighth largest insurance broker in the United States and the 13th largest in the world.
 ABI has been ranked the 11th largest insurance broker in the United States and the 17th largest in the world.
 Based on 1992 gross revenues, after the acquisition, Acordia would be the seventh largest in the United States, and the ninth largest in the world.
 -0- 8/26/93
 /CONTACT: William Carmichael, media, 317-488-6248, or Thomas Vanneman, investors, 317-488-6246, both of Acordia, Inc./

CO: Acordia, Inc.; American Business Insurance; American Financial Corp ST: Indiana IN: INS SU: TNM

AR -- CL002 -- 5969 08/26/93 07:01 EDT
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Publication:PR Newswire
Date:Aug 26, 1993

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