-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KWNDzXbPyZbvjTWajL2RLG9Wf8L/PqSAAn+l8objthM9FHHhK79XgFfo7ZLP3zqx +BRrLvCHbLutpIqmZ6iRow== 0000914039-95-000162.txt : 19951124 0000914039-95-000162.hdr.sgml : 19951124 ACCESSION NUMBER: 0000914039-95-000162 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951108 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951122 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERKLEY W R CORP CENTRAL INDEX KEY: 0000011544 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 221867895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-07849 FILM NUMBER: 95595643 BUSINESS ADDRESS: STREET 1: 165 MASON ST STREET 2: P O BOX 2518 CITY: GREENWICH STATE: CT ZIP: 06836-2518 BUSINESS PHONE: 2036293000 MAIL ADDRESS: STREET 1: 165 MASON ST STREET 2: PO BOX 2518 CITY: GREENWICH STATE: CT ZIP: 06836-2518 8-K 1 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 8, 1995 W.R. BERKLEY CORPORATION ----------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-7849 22-1867895 ---------------------- ------------------- --------------- (State of incorporation (Commission File No.) (I.R.S. Employer or organization) Identification No.) 165 Mason Street, P.O. Box 2518 Greenwich, Connecticut 06836-2518 - --------------------------------------- --------------- (Address of principal executive offices) Zip Code Registrant's telephone number, including area code: 203-629-3000 2 Item 2. Acquisition or Disposition of Assets. On November 8, 1995, W.R. Berkley Corporation (the "Company"), Berkley Newco Corp. and MECC, Inc. ("MECC") consummated the transactions contemplated by an Agreement and Plan of Merger, dated as of September 14, 1995, pursuant to which MECC became a wholly-owned subsidiary of the Company. MECC is an insurance holding company which, through its sole, wholly-owned subsidiary, Midwest Employers Casualty Company, markets and underwrites excess workers' compensation insurance. Former holders of MECC common stock, options and warrants received an aggregate amount in cash equal to $141,467,014, constituting $138,000,000 plus interest thereon at the rate of 7% per annum from July 1, 1995 through the closing date, which amount was determined as a result of arm's length negotiations between representatives of each of the Company and MECC. In connection with the acquisition, the Company prepaid approximately $18.1 million of MECC's outstanding indebtedness and agreed to redeem approximately $1.4 million aggregate principal amount of MECC's outstanding subordinated debentures. The acquisition of MECC was financed with the net proceeds from the public offering of 3,450,000 shares of common stock, par value $.20 per share, of the Company, which was consummated on October 12, 1995. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial statements of MECC, Inc. *Independent Auditors' Report *Consolidated Balance Sheets as of December 31, 1993 and 1994 *Consolidated Statements of Income for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Cash Flows for the years ended December 31, 1992, 1993 and 1994 *Notes to Consolidated Financial Statements *Incorporated by reference to Item 7(a) of the Current Report on Form 8-K of W.R. Berkley Corporation, dated September 14, 1995, as filed with the Securities and Exchange Commission on September 18, 1995. Consolidated Balance Sheets as of December 31, 1994 and September 30, 1995 (Unaudited) Consolidated Statements of Income for the nine months ended September 30, 1994 and 1995 (Unaudited) Consolidated Statements of Changes in Stockholders' Equity for the nine months ended September 30, 1994 and 1995 (Unaudited) Consolidated Statements of Cash Flows for the nine months ended September 30, 1994 and 1995 (Unaudited) Notes to Interim Consolidated Financial Statements (b) Pro forma financial information. Pro Forma Condensed Consolidated Balance Sheet at September 30, 1995 Pro Forma Condensed Consolidated Statement of Operations for the Nine Months ended September 30, 1995 3 (c) Exhibits. The following Exhibits are filed as part of this report. Exhibit 2.1. Agreement and Plan of Merger, dated as of September 14, 1995, by and among W.R. Berkley Corporation, Berkley Newco Corp. and MECC, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of W.R. Berkley Corporation, dated September 14, 1995, as filed with the Securities and Exchange Commission on September 28, 1995). Exhibit 20.1. Financial statements of MECC, Inc.: *Consolidated Balance Sheets as of December 31, 1993 and 1994 *Consolidated Statements of Income for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Cash Flows for the years ended December 31, 1992, 1993 and 1994 *Notes to Consolidated Financial Statements *Incorporated by reference to Item 7(a) of the Current Report on Form 8-K of W.R. Berkley Corporation, dated September 14, 1995, as filed with the Securities and Exchange Commission on September 18, 1995. Exhibit 99.1. Press Release issued by W.R. Berkley Corporation, dated November 8, 1995. 4 MECC, Inc. and Subsidiary Interim Consolidated Statements of Income For Nine months ended September 30, 1994 and 1995 (Unaudited) (Dollars in thousands, except share amounts)
1994 1995 ---- ---- Revenues: Gross premiums written $ 70,514 $ 61,771 Less: Ceded reinsurance premiums 4,584 4,520 Increase in unearned premiums, net 5,067 1,462 ---------- ---------- Net premiums earned 60,863 55,789 Net investment income 13,319 16,666 Net realized investment gains 388 133 ---------- ---------- 74,570 72,588 ---------- ---------- Expenses: Losses and loss expenses 33,598 31,005 Salaries and employee benefits 2,311 2,486 Commissions to agents 9,799 9,179 Taxes, licenses, and fees 2,692 2,579 Other underwriting expenses 1,411 1,779 Interest expense 856 1,366 ---------- ---------- 50,667 48,394 ---------- ---------- Income before provision for income taxes 23,903 24,194 Provision for income taxes: Current 4,258 4,751 Deferred 3,261 2,621 ---------- ---------- Total income tax 7,519 7,372 Net income $ 16,384 $ 16,822 ========== ========== Net income per share $ 1.98 $ 2.03 Weighted average common and common equivalent shares 8,278,244 8,269,894
See accompanying notes to interim consolidated financial statements. 5 MECC, Inc. and Subsidiary Interim Consolidated Balance Sheets December 31, 1994 and September 30, 1995 (Unaudited)
1994 1995 ---- ---- Assets Investments: Fixed maturities: Available for Sale at fair value (amortized cost - $59,939, in 1994 and $58,709 in 1995) 54,076 58,483 Held to maturity at amortized cost (fair value- $222,114 in 1994 and $278,252 in 1995 231,080 268,688 ------- ------- Total fixed maturities 285,156 327,171 Equity securities at fair value (cost - $8,382 in 1994 and $10,069 in 1995) 8,949 12,238 ------- ------- Total investments 294,105 339,409 ------- ------- Other assets: Cash and cash equivalents 5,155 6,419 Premiums receivable, net of allowance for doubtful accounts of $92 in 1994 and $82 in 1995, respectively 7,061 9,092 Reinsurance recoverable on losses and loss expenses: Paid claims 9 11 Unpaid claims 35,659 42,203 Accrued investment income 5,293 5,323 Prepaid reinsurance premiums 2,026 2,094 Deferred acquisition costs 5,454 5,588 Furniture, fixtures and equipment, net 831 971 Intangible assets, net 188 148 Other assets 666 680 ------- ------- Total other assets 62,342 72,529 ------- ------- Total assets 356,447 411,938 ------- ------- Liabilities and Stockholder's Equity Losses and loss expenses 178,252 207,523 Unearned premiums 27,281 28,811 Accrued operating expenses 2,343 1,974 Accrued interest on notes payable 220 234 Reinsurance Premium Payable 1,238 1,471 Federal income tax payable 3,371 94 Funds held under reinsurance treaties 59 62 Amounts withheld for the account of others 1,162 1,658 Deferred federal income taxes 18,145 23,299 Revolving credit facility 16,350 18,150 Subordinated debentures 2,669 1,778 ------- ------- Total liabilities 251,090 285,054 ------- ------- Commitments and contingencies Stockholders' equity Common stock: Class B, no par value; authorized 18,100,000 shares, issued and outstanding 5,989,375 shares in 1994 and 1995 11,218 11,218 Class C, no par value; authorized 1,900,000 shares, issued and outstanding 1,848,475 shares in 1994 and 1995 10,230 10,230 Unrealized gain (loss) on securities, net of tax (3,442) 1,263 Retained earnings 87,351 104,173 ------- ------- Total stockholders' equity 105,357 126,884 ------- ------- Total liabilities and stockholders' equity 356,447 411,938 ======= =======
See accompanying notes to interim consolidated financial statements. 6 MECC, Inc. and Subsidiary Interim Consolidated Statements of Changes In Stockholders' Equity Nine months ended September 30, 1994 and 1995 (Unaudited) (Dollars in thousands, except share amounts)
Common Stock ------------------------------------------------- Unrealized Class B Class C gain on ----------------------- ---------------------- securities, Retained Shares Amount Shares Amount net earnings --------- ---------- --------- ---------- ---------- ---------- September 30, 1994 Balance - December 31, 1993 5,989,375 11,218 1,848,475 10,230 1,593 60,032 Net Income 16,384 Unrealized (loss) - equity and available for sale securities (4,222) --------- ---------- --------- ---------- ---------- ---------- Balance, September 30, 1994 5,989,375 $ 11,218 1,848,475 $ 10,230 ($ 2,629) $ 76,416 ========= ========== ========= ========== ========== ========== September 30, 1995 Balance - December 31, 1994 5,989,375 11,218 1,848,475 10,230 (3,442) 87,351 Net Income 16,822 Unrealized (loss) - equity and available for sale securities 4,705 --------- ---------- --------- ---------- ---------- ---------- Balance, September 30, 1995 5,989,375 $ 11,218 1,848,475 $ 10,230 $ 1,263 $ 104,173 ========= ========== ========= ========== ========== ==========
See accompanying notes to interim consolidated financial statements. 7 MECC, Inc. and Subsidiary Interim Consolidated Statements of Cash Flows Nine Months Ended September 30, 1994 and 1995 (Unaudited) (Dollars in thousands)
1994 1995 ---- ---- Cash flows from operating activities Net Income 16,384 16,822 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 234 276 Loss on disposal of furniture, fixtures and equipment -- 3 Net amortization of bond discount (60) (73) Provision for deferred income taxes 3,261 2,621 Net realized investment gains (388) (133) Changes in assets and liabilities: Premiums receivable (3,378) (2,031) Reinsurance recoverable on losses and loss expenses, paid and unpaid (9,907) (6,546) Accrued investment income 53 (30) Federal income tax recoverable 274 -- Prepaid reinsurance premiums (1,132) (68) Deferred acquisition costs (862) (134) Deferred costs, net (553) -- Other assets (179) (14) Losses and loss expenses 36,747 29,271 Unearned premiums 6,199 1,530 Accrued operating expenses 386 (369) Accrued interest on notes payable (327) 14 Reinsurance premiums payable 471 233 Federal income tax payable -- (3,277) Funds held under reinsurance treaties 49 3 Amounts withheld for the account of others 85 496 -------- -------- Net cash provided by operating activities 47,357 38,594 -------- -------- Cash flows from investing activities: Fixed maturities: Proceeds from sale or redemption of assets available for sale 1,521 1,250 Purchase of assets available for sale (18,352) -- Proceeds from sale or redemption of assets held to maturity 6,383 7,943 (See note 1) Purchase of assets held to maturity (34,305) (45,407) Equity securities: Proceeds from sale or redemption of equity securities 252 44 Purchase of equity securities (1,652) (1,687) Purchase of furniture, fixtures, and equipment (285) (373) -------- -------- Net cash used in investing activities (46,438) (38,230) -------- -------- Cash flows from financing activities: Proceeds from revolving credit facility 7,700 1,800 Payment of principal on subordinated debentures and note payable to bank (10,200) (900) -------- -------- Net cash provided by (used in) financing activities (2,500) 900 -------- -------- Net increase (decrease) in cash and cash equivalents (1,581) 1,264 Cash and cash equivalents: Beginning of period 4,739 5,155 -------- -------- End of period $ 3,158 $ 6,419 ======== ========
8 MECC, Inc. and Subsidiary Notes to Interim Consolidated Financial Statements (Unaudited) (1) General The interim consolidated financial statements have been prepared on the basis of generally accepted accounting principles and, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of results for such periods. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the consolidated financial statements as of December 31, 1993 and 1994, and for each of the years in the three-year period ended December 31, 1994, and related notes thereto, presented elsewhere herein. (2) During June 1995, the Company sold a bond with an amortized cost of $1,008,011 from its held to maturity portfolio due to a significant deterioration in the issuer's creditworthiness. The sale of the bond generated a $19,999 realized gain. 9 CONSOLIDATED PRO FORMA CONDENSED FINANCIAL INFORMATION OF THE COMPANY The following tables present the Company's consolidated pro forma condensed balance sheet as of September 30, 1995 assuming the acquisition of MECC and Signet Star Holdings, Inc. (Signet Star) took place as of September 30, 1995 and pro forma condensed statements of operations for the nine months ended September 30, 1995 assuming the acquisition took place as of January 1, 1995. The pro forma consolidated financial data do not purport to represent what the Company's financial position or results of operations actually would have been had the Acquisitions and related financings in fact occurred on the dates indicated, or to project the Company's financial position or results of operations for any future date or period. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable in the circumstances. Allocations are subject to valuation as of the closing dates of the acquisitions and, accordingly, the final allocations will be different from the amounts herein. The consolidated pro forma condensed financial data should be read in conjunction with the financial statements of the Company, including the notes thereto, incorporated by reference herein and the other financial information incorporated by reference herein. The acquisitions were accounted for as purchase transactions. Balance sheet (in thousands):
September 30, 1995 ----------------------------------------------------------- Pro forma Pro forma Company Pro forma Pro forma Signet Star for the as MECC as Acquisition Financing Acquisition acquisition & reported reported adjustments adjustments adjustments financing -------- -------- ----------- ----------- ----------- --------- Total investments $2,161,304 $ 345,828 $9,564 (i) $(16,000) (c) -- 2,500,696 Total assets 3,867,725 411,938 15,584 (i)(ii) (16,000) (742,227)(w)(y) 3,537,020 Reserve for losses and loss expenses 2,148,449 207,523 1,000 -- (735,144)(y) 1,621,828 Corporate debt 255,141 -- -- -- -- 255,141 Subsidiary debt 67,076 19,928 -- (19,640)(b) -- 67,364 Minority Interest 75,069 -- -- -- (72,583) 2,486 Stockholders' equity 682,919 126,884 (126,884) 145,107 (a) 65,500 (z) 893,526
10 Statement of operations (in thousands):
Nine months ended September 30, 1995 ---------------------------------------------------------------------------------- Pro forma Proforma Company MECC Proforma Proforma Signet Star for the as as Acquisition Financing Acquisition acquisition & reported reported adjustments adjustments adjustments financing -------- -------- ----------- ----------- ----------- --------- Net premiums written $ 642,206 $57,251 $ -- $ -- -- $ 699,457 Net investment income 96,332 16,666 -- (804)(c) -- 112,194 Total revenues 737,267 72,588 -- (804)(c) -- 809,051 Operating costs and expenses: Losses and loss expenses (415,435) (31,005) -- -- -- (446,440) Other operating costs & expenses (241,962) (16,023) (170)(ii) -- 2,552 (w) (255,603) Interest expense (21,216) (1,366) -- 1,366 (b) -- (21,216) --------- --------- -------- --------- -------- --------- Income before income taxes & minority interest 58,654 24,194 (170) 562 2,552 85,792 Federal income tax (expense) benefit (11,291) (7,372) -- (197) 383 (x) (18,477) --------- --------- -------- --------- -------- --------- Income before minority interest 47,363 16,822 (170) 365 2,935 67,315 Minority Interest (3,627) -- -- -- 3,649 22 --------- --------- -------- --------- -------- --------- Net income before preferred dividends 43,736 16,822 (170) 365 6,584 67,337 Preferred dividends (8,297) -- -- -- (3,870)(z) (12,167) --------- --------- -------- --------- -------- --------- Net income attributable to common stockholders $ 35,439 $ 16,822 $ (170) $ 365 $ 2,714 $ 55,170 ========= ========= ======== ========= ======== ========= Net income per share $ 2.12 $ $ $ $ $ 2.74 ========= Average shares outstanding 16,693 3,450 (a) 20,143 ========= ========= =========
11 NOTES TO CONSOLIDATED PRO FORMA CONDENSED FINANCIAL INFORMATION (1). Pro Forma adjustments for the acquisition of MECC The pro forma adjustments for the acquisition reflect: (i) an adjustment to mark all investments to fair market value; (ii) recognition of excess of cost over net assets acquired, and (iii) an adjustment to reflect reserves discounted based on the U. S. Treasury yield curve weighted for the expected payout period of the loss reserves as of September 30, 1995. Allocations are subject to valuation as of the closing date of the acquisition and, accordingly, the final allocations will be different from the amounts herein. (i) Mark-to-Market investments: Investments at fair market value $ 348,973 Carrying value of investments 339,409 ----------- $ 9,564 =========== (ii) Excess of cost over net assets acquired: Purchase price $ 141,467 MECC equity (126,884) Net purchase adjustments (5,566) ----------- $ 9,017 ===========
The excess of cost over net assets acquired will be amortized over 40 years which results in amortization expense of $170 for the nine months ended September 30, 1995. (iii) Reserve adjustment to reflect reserves discounted to approximately 6.85% as of September 30, 1995. (2) Proforma adjustments for the financing The pro forma adjustments for the financing reflect: (a) the issuance of 3,450,000 shares of Berkley common stock at $43.75 per share (net of underwriting discount and expenses); (b) the retirement of MECC's outstanding indebtness, and (c) the net cash required to complete the acquisition of MECC and the retirement of MECC's outstanding indebtedness. (a) Issuance of Common Stock: Shares of Common Stock 3,450 Price per share $ 43.75 -------- Gross proceeds 150,938 Underwriting discount and expenses (5,831) -------- Net proceeds $145,107 ========
(b) Retirement of MECC's outstanding indebtedness (c) Net cash required to complete the acquisition of MECC and retire MECC's outstanding indebtedness Purchase price $ 141,467 Retirement of MECC outstanding indebtedness 19,640 ---------- Total cash required 161,107 Net proceeds of sale of Common Stock (145,107) ---------- Net cash required $ 16,000 ==========
Net investment income will be affected by the use of the Company's available cash to finance the acquisition of MECC. The Company's average rate of return on investments of 6.7% for the nine months ended September 30, 1995 was used in calculating the effect in investment income. This resulted in a charge of $804. 12 (3) Pro forma adjustments for the acquisition of Signet Star Holdings, Inc. On July 20, 1995, the company entered into an Agreement and Plan of Restructuring with General Re Corporation ("General Re") pursuant to which the company would purchase from General Re all of the capital stock of Signet Star Holdings, Inc. ("Signet Star") owned by General Re. As a result of a 1993 venture between the two companies, the company currently owns 60% and General Re currently owns 40% of Signet Star. The pro forma adjustments for the acquisition of Signet Star reflect; (w) the adjustment to fair value the $68,000,000 aggregate liquidation preference of the Series B Cumulative Redeemable Preferred Stock to be issued by the Company to General Re and the recognition of the excess of net assets acquired over cost; (x) the inclusion of Signet Star Holdings in the Company's consolidated tax return; (y) the sale of Signet Star Reinsurance Company to General Re; and (z) the issuance of 450,000 shares of Series B Cumulative Redeemable Preferred Stock to General Re: (w) Fair value of Preferred Stock and excess of net assets acquired over cost: Purchase price $ 68,800 Fair value adjustment (3,300) -------- Preferred Stock at fair value 65,500 Book value at September 30, 1995 72,583 -------- Excess of net assets acquired over cost $ 7,083 ========
The accounting for the issuance of the Preferred Stock requires that a market rate of interest, not the contractual rate, be used to establish fair value. The excess of net assets acquired over cost will result in a reduction in intangible assets, the effect of which would have been to reduce the Company's other operating costs and expenses by $2,552,000 for the nine months ended September 30, 1995. (x) The tax adjustment is to reflect Signet Star Holding's inclusion in the Company's consolidated federal income tax return. (y) Sale of Signet Star Reinsurance Company to General Re In connection with the formation of Signet Star, Signet and Signet Star Reinsurance Company each entered into a Retrocessional Agreement (the "Retrocessional Agreement") with Admiral Insurance Company ("Admiral") and General Reinsurance Corporation ("GRC"), respectively, pursuant to which Signet Reinsurance Company and Signet Star Reinsurance Company reinsured their respective liabilities and assigned their respective rights and obligations arising from any insurance or reinsurance contracts written prior to January 1, 1993 with and to Admiral and GRC, respectively. Under current accounting principles, the business ceded to GRC under the Retrocessional Agreement is treated as "retroactive" reinsurance (i.e. reinsurance of a loss which had occurred before the reinsurance became effective). Under such accounting principles, the Company reports reserves for losses and loss expenses gross of reinsurance and reinsurance ceded for unpaid losses and loss adjustment expense is reported as due from reinsurers. Pursuant to the Agreement and Plan of Restructuring, Signet Star Holdings will sell Signet Star Reinsurance Company to General Re. As a result of this transaction, business written by Signet Star Reinsurance Company prior to January 1, 1993, which has been retroceeded to General Re, will no longer be reflected in the Company's financial statements. The only effect to the Company's financial statements resulting from this aspect of the transaction will be that the Company's reserves for losses and loss expenses will be reduced by $735,144,000 and "due from reinsurers" will be reduced by the same amount. This aspect of the transaction will not effect the Company's cash flow, stockholders' equity or statements of operations as reported. (z) Issuance of 450,000 shares of Series B Cumulative Redeemable Preferred Stock As stated above the company will issue to General Re 450,000 shares of Series B Cumulative Redeemable Preferred Stock. The preferred stock will have a dividend rate increasing up to 6% during the first twelve months after issuance. The rate is thereafter subject to readjustment based on certain predetermined conditions. The preferred stock will be carried at its fair value of $65,500,000, based upon the current estimate of the ultimate interest rate, and will be accreted to its face value of $68,800,000. The preferred dividend expense for the nine months ended September 30, 1995 would have been $3,870,000. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. W.R. Berkley Corporation ------------------------ (Registrant) Dated: November 21, 1995 By: /s/ William R. Berkley ------------------------ Name: William R. Berkley Title: Chairman of the Board, Chief Executive Officer and President 15 14 EXHIBIT INDEX
Sequential Exhibit Page No. 2.1. Agreement and Plan of Merger, dated as of September 14, 1995, by and among W.R. Berkley Corporation, Berkley Newco Corp. and MECC, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of W.R. Berkley Corporation, dated September 14, 1995, as filed with the Securities and Exchange Commission on September 28, 1995). 20.1. Financial Statements of MECC, Inc.: *Independent Auditors' Report *Consolidated Balance Sheets as of December 31, 1993 and 1994 *Consolidated Statements of Income for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1992, 1993 and 1994 *Consolidated Statements of Cash Flows for the years ended December 31, 1992, 1993 and 1994 *Notes to Consolidated Financial Statements *Incorporated by reference to Item 7(a) of the Current Report on Form 8-K of W.R. Berkley Corporation, dated September 14, 1995, as filed with the Securities and Exchange Commission on September 18, 1995. 99.1. Press Release issued by W.R. Berkley Corporation, dated November 8, 1995.
16 EX-99.1 2 EX-99.1 1 W. R. BERKLEY CORPORATION NEWS 165 MASON STREET, P.O. BOX 2518 RELEASE GREENWICH, CONNECTICUT 06836-2518 (203) 629-3000 FOR IMMEDIATE RELEASE CONTACT: Anthony J. Del Tufo Senior Vice President (203) 629-3000 Greenwich, Connecticut November 8, 1995 W.R. BERKLEY CORPORATION ANNOUNCES THE ACQUISITION OF MECC, INC. W. R. Berkley Corporation (NASDAQ: BKLY) today announced the closing of the acquisition of MECC, Inc. Pursuant to a previously announced agreement, W.R. Berkley Corporation paid MECC's stockholders approximately $138 million in cash and also repaid approximately $20 million of MECC's outstanding indebtedness. MECC, through its subsidiary, Midwest Employers Casualty Company ("Midwest"), is a leading provider of excess workers' compensation coverages to self-insureds. William R. Berkley, Chairman, CEO and President, stated, "We are very pleased to add a company of Midwest's quality to our group. Midwest is led by an outstanding management team and offers products that will greatly enhance our presence in the expanding alternative market." W.R. Berkley Corporation is an insurance holding company which, through its subsidiaries, operates in four segments of the insurance business: regional property casualty insurance; reinsurance; specialty lines of insurance; and insurance services operations (which provide services to alternative insurance market mechanisms). -----END PRIVACY-ENHANCED MESSAGE-----