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
June 21, 1996
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Date of Report (Date of earliest event reported)
HIGHLANDS INSURANCE GROUP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-14028
(Commission File Number)
No. 75-2370945
(IRS Employer Indentification Number)
10370 Richmond Avenue, Houston, Texas 77042-4123
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (713) 952-9555
INFORMATION TO BE INCLUDED IN REPORT
Item 5 Other Events
The registrant, may at its option, report under this item any events,
with respect to which information is not otherwise called for by this
form, that the registrant deems of importance to security holders.
(a) On June 21, 1996, the registrant, Highlands Insurance Group,
Inc., issued a press release entitled "Highlands Insurance Group, Inc.
Signs Definitive Agreement to Acquire Vik Brothers Insurance, Inc."
pertaining, among other things, to the announcement that the registrant
had signed a definitive agreement to acquire Vik Brothers Insurance, Inc.
of Lawrenceville, New Jersey for total consideration of $164 million,
including the assumption and repayment of certain stock, bank debt and
cash. The transaction is subject to the registrant's shareholder and
regulatory approval and is expected to close later this year.
Following the acquisition, Alexander M. Vik and Gustav M. Vik, co-owners
of Vik Brothers Insurance, Inc. will own approximately 2.3 million shares
of the common stock of the registrant valued at $44 million, representing
9.8% of the registrant on a fully diluted basis. The Viks will both join
the registrant's Board of Directors, and Alexander M. Vik will be named
Vice Chairman. The registrant has agreed to pay additional future
consideration in the event that Vik Brothers' operating results for the
years 1997-1999 exceed certain financial targets.
(b) Exhibits
Exhibit 1 - Press release dated June 21, 1996
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.
HIGHLANDS INSURANCE GROUP, INC.
Date: July 2, 1996
By: /s/ Michael A. Weberpal
Michael A. Weberpal
Vice President and Secretary
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EXHIBIT 1
FOR IMMEDIATE RELEASE Contact: Charles J. Bachand
June 21, 1996 Vice President
(713)267-8567
(713)267-8688 (Facsimile)
HIGHLANDS INSURANCE GROUP, INC.
SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
VIK BROTHERS INSURANCE, INC.
Highlands Insurance Group, Inc. (Highlands)(NYSE:HIC), a
regional property and casualty insurer, announced today that it
has signed a definitive agreement to acquire VIK Brothers
Insurance, Inc. of Lawrenceville, NJ (VIK Brothers) for total
consideration of $164 million, including the assumption and
repayment of certain debt and preferred stock. Highlands will
finance the acquisition with a combination of common stock, bank
debt and cash. The transaction is subject to Highlands'
shareholder and regulatory approval and is expected to close
later this year.
VIK Brothers is an insurance holding company that primarily
writes commercial property and casualty business for small to
medium sized companies and, to a lesser extent, personal lines
business. The company is licensed in 44 states and operates
through more than 3,150 independent agents and twelve regional
offices. For the year ended December 31, 1995, VIK Brothers had
net premiums earned of $297 million and operating income,
excluding realized gains, interest charges and purchase
accounting adjustments, of approximately $12 million.
Richard M. Haverland, Chairman and Chief Executive Officer
of Highlands, states, "The acquisition of VIK Brothers is
consistent with our goal of establishing Highlands as a platform
for the acquisition of specialty and regionally based property
and casualty companies. The transaction will almost triple
Highlands' premium base and is expected to be immediately
accretive to earnings per share, which we believe will
demonstrate that a disciplined and opportunistic acquisition
strategy can create and enhance shareholder value."
Following the acquisition, Alexander M. Vik and Gustav M.
Vik, co-owners of VIK Brothers, will own approximately 2.3
million shares of the common stock of Highlands valued at $44
million, representing 9.8% of the company on a fully diluted
basis. The Viks will both join the Highlands' Board of Directors
and Alexander M. Vik will be named Vice Chairman. Highlands has
agreed to pay additional future consideration in the event that
VIK Brothers operating results for the years 1997 - 1999 exceed
certain financial targets.
Alexander M. Vik states, "We are excited about the
opportunity to join the Highlands' platform. Both companies
share a commitment to achieving underwriting profitability and
the financial strength of Highlands should enhance our
competitive position. We believe that VIK Brothers can add to
Highlands' expertise and we look forward to contributing to the
growth of their overall business."
Highlands is a regional insurance holding company that is
primarily engaged in the commercial property and casualty
insurance business, specializing in workers' compensation,
general liability and other related coverages. Highlands was
spun-off from Halliburton Company in January 1996, at which time
Insurance Partners, L.P. and certain members of senior management
at Highlands invested approximately $62.8 million in the company.
