Gainsco To Acquire Florida Nonstandard Personal Automobile Operation

Fort Worth-based Gainsco, Inc. says it has executed definitive agreements to acquire Lalande Group, a privately owned Miami-based firm, for up to $40 million. Lalande specializes in underwriting, servicing and claims adjusting in the nonstandard private passenger automobile insurance market in Florida.

"This is the first major step in our transformation process to expand and diversify the earnings base of our Company," says Glenn W. Anderson, president and CEO of Gainsco. "The Lalande Group is a strong, disciplined, and highly integrated marketing, underwriting, and claims organization that is operating very successfully in the Florida nonstandard private passenger auto marketplace. The combination of our two organizations will generate a valuable new source of underwriting earnings and establish a strong foundation for expansion beyond Florida in the future, working together with Gainsco's agency force."

Lalande Group has two principal corporations. The first is National Specialty Lines, Inc. (NSL), a managing general agency established in 1989 which markets nonstandard private passenger insurance through over 500 retail agencies in Florida and expects to produce approximately $45 million in gross premiums written in 1998. The second is De la Torre Insurance Adjusters, Inc. (DLT) a 20-year old automobile claims adjusting operation that provides services to NSL and to third parties for a fee. After completion of the acquisition, Lalande Group will operate from its existing Miami, FL base.

The company says the purchase price consideration will consist of $18 million in cash at closing, plus up to an additional $22 million in cash over approximately five years linked directly to operating performance. The acquisition is expected to be minimally accretive in 1999 during the transition period to a totally integrated business line and is expected to provide significant accretion in subsequent years. The transaction is expected to be dilutive in 1998 and to be funded with borrowings or internally generated funds. The transaction is expected to close by early in the fourth quarter of 1998.

Gainsco's financial advisor for the transaction was Wasserstein Perella & Co. Lalande Group was advised by Metis Financial, LLC.