Doctor's financial service provider offers about $5 million more for APIE. American Physicians Service Group (APS) has agreed to increase the price it is willing to pay for American Physicians Insurance Exchange (APIE) by more than $5 million to $39 million because of APIE's strong second quarter. Under the new terms APS will pay something over $28 million in its stock and assume of $10.4 million of APIE's obligations, convertible to APS preferred stock with a cash redemption requirement.

"We believe that this combination continues to be the natural evolution of two companies founded simultaneously with similar purposes," says Ken Shifrin, chairman of APS' board of directors. "We believe that our partnership will provide increased opportunities for both the policyholders of APIE and the shareholders of APS."

Fair's fair

Austin, Texas-based APS is a management and financial-service firm with subsidiaries and affiliates that provide malpractice-insurance services to medical doctors, and brokerage and investment services to institutions and high-net-worth individuals -- mostly medical practices and physicians.

Also based in Austin, APIE is a malpractice-insurance consultancy for medical doctors in Texas and Arkansas.

Back on 5 June 2006, APS publicized its intention to buy APIE in exchange for about $24 million in its stock and the assumption of $10.4 million of APIE's payments due third parties.

"During its second quarter ended June 30, 2006, APIE recorded much better than expected net income of $7.3 million, with surplus increasing a similar amount," says Shifrin. "Along with steady operating results, APIE has had positive development on claims reserves and on reinsurance treaties since we originally agreed on a price."

The deal has to be approved by the Texas Department of Insurance, the Securities and Exchange Commission, APS's shareholders and APIE's policyholders. -FWR

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