TORONTO (AFX) - Kingsway Financial Services Inc. has signed a definitive agreement to acquire the Mendota Insurance Co. auto insurance subsidiary of St. Paul, Minn.-based The St. Paul Travelers Companies Inc.
Terms of the deal were not disclosed.
Toronto-based Kingsway will acquire Mendota subsidiaries Mendakota Insurance Co. and Mendota Insurance Agency Inc.
'It is anticipated that the purchase price will be funded through internal sources, a portion of which may include Kingsway's existing undrawn credit facilities,' Kingsway said in a release.
Mendota provides non-standard automobile insurance in 43 states.
'This transaction is consistent with our strategy to become a dominant player in the non-standard automobile market in the United States as evidenced by this acquisition and our existing subsidiaries devoted to this line of business,' said Kingsway president and CEO Bill Star.
Kingsway is a major insurance provider to truckers and automobile drivers who do not meet the criteria for coverage by standard automobile insurers.
Shares in the company were down 18 cents to $20.44 in afternoon trading on the New York Stock Exchange.
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