Pacific Specialty Insurance Co. of Anaheim and its affiliated McGraw Insurance Inc. were sold last week for $299.5 million to BHIC Inc., a unit of publicly traded Biglari Holdings Inc. in San Antonio.
The deal includes $24 million in cash at closing and $275.5 million of deferred payments—$175.5 million in cash over a 10-year period and $100 million from a promissory note that matures upon the death of Michael J. McGraw for the benefit of the University of Notre Dame.
Pacific Specialty sells specialty and general insurance and keeps a second office in Palo Alto. The ownership change won’t alter day-to-day operations and it will operate independently of Biglari Holdings.
“We now have a permanent home for [this] family business [we have] developed over the decades,” Mike McGraw, chief executive of Pacific Specialty, said in a statement. “I’m looking forward to running the company as CEO for as long as possible.”
Pacific Specialty didn’t respond to an email or a phone message asking for elaboration on details of the transaction, such as the names of the executives.
Biglari Holdings, founded by Sardar Biglari, sells media, property and casualty insurance, and also runs restaurants. It traded recently at a market cap of $791 million and generated $845 million in revenue in the trailing 12 months.
The transaction, subject to regulatory approvals, is expected to close in the third quarter.