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ARAG Group Acquires LegalWise
|Issued by: ARAG Group
Date: July 10, 2002
|ARAG GROUP ACQUIRES LEGALWISE
- Leading legal insurance company acquires competitor to complement product offerings and market expertise -
- ARAG Group seeking other acquisition opportunities -
DES MOINES, Iowa - July 10, 2002 - ARAG Group, a leading legal advisory plan administrator, announces today that it has acquired the assets of LegalWise North America, a legal insurance provider, headquartered in Tampa, Fla.
The acquisition allows ARAG Group to expand its market share in the corporate group legal insurance market, while opening new markets for the company in the general consumer and affinity marketplaces, which are areas of expertise for LegalWise.
“By acquiring LegalWise, ARAG Group is clearly established as the legal insurance industry leader,” said Jim Brennan, president of ARAG Group. “We’re extremely excited about the opportunity this acquisition provides. LegalWise has built tremendous strengths in specific markets, and ARAG Group will reap the benefits by adding business from new corporate sponsorships, while also expanding our product offerings and distribution channels.”
David A. Schlaifer, president and CEO of LegalWise, shared the sentiments. “We always found ARAG Group to be our toughest competitor,” Schlaifer said. “ARAG Group's acquisition of LegalWise will provide them with a new dimension, adding a level of innovation and cutting edge technology to their already strong market leadership. We share a remarkably common culture and customer focus, which will result in a smooth transition and an even stronger provider for both our and their customers. This acquisition clearly positions ARAG Group as an industry leader.”
The terms of the acquisition, which are subject to final shareholder and regulatory approvals, are not being disclosed. However, the attainment of business will add the following to ARAG Group’s operations:
- 165 corporate accounts, added to ARAG Group’s existing 275 corporate clients.
- One million eligibles, added to ARAG Group’s existing eligible insured base of more than 2 million.
ARAG has witnessed an increase in demand for its group legal advisory plans. According to the Society for Human Resource Management (SHRM) and its 2002 Benefits Survey, the number of companies offering legal assistance/service benefits has grown by 44 percent over the past five years. According to ARAG Group, it has nearly doubled the industry average - the number of organizations offerings its legal plans as an employee benefit has increased by nearly 80 percent over the past five years.
LegalWise also has had rapid growth over the past several years, adding such clients as AT&T, IBM, Honeywell, Miller Brewing Co., Georgia Pacific, Home Depot, Northrop Grumman, Phillip Morris, 7-Eleven and others. The company has developed successful relationships with the major benefit platforms, including Rewards Plus, Prudential WorkingSolutions, YouDecide.com, Answer Financial and Aon.
Schlaifer said the timing is right for industry consolidation. “We believe that we needed to either be a buyer or seller in order to leverage the increasing growth opportunities within the industry,” he said. “We had considered other deals, but found a common culture with ARAG Group, one with which we were comfortable knowing our customers would be taken care of.”
Brennan added that ARAG Group might seek out other acquisition targets in the near future. “ARAG Group initiated an ambitious five-year plan in 2001 that called for expansion in our core employer sponsored group legal segment and diversification in other distribution channels and alliances,” he said. “We recognize that while most of our growth will be internally developed, acquisitions will play a role. We are identifying organizations that further enhance our core competencies, while allowing us expansion opportunities in new markets.”
About ARAG Group
Founded in 1973, ARAG Group () administers more professional legal advisory plans than any other company, and maintains its domestic headquarters in Des Moines, Iowa. In 2002, the American Bar Association awarded the company meritorious recognition in the Louis M. Brown Award for Legal Access. Also this year, the A.M. Best Company assigned ARAG Insurance Company a Best’s Rating of A (Excellent). The company’s current corporate clients include industry leaders such as Ford Motor Company, Microsoft Corporation, Nokia, Oracle Corporation, The Procter & Gamble Company and Wachovia (formerly First Union Corporation). The parent company, Allgemeine Rechtsschutz Versicherungs Aktien Gesellschaft (ARAG), is headquartered in Germany with locations in 12 countries in addition to the United States. It maintains 12 million plan members and insureds worldwide.
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For more information: http://www.araggroup.com
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