Employees and owners of National Interstate Corp. had a lot to celebrate Thursday in Richfield.
In the morning, shareholders agreed to make the niche insurer a wholly owned subsidiary of its majority shareholder, Cincinnati-based American Financial Group.
And in the afternoon, the company held a groundbreaking ceremony for a 117,000-square-foot, state-of-the-art office building at its Kinross Lakes Parkway campus.
National Interstate expects to create hundreds of new jobs to fill the building, its third at the site. In upcoming years the company expects to have as many as 1,000 employees on its campus, 450 more than it has now.
“It means we can grow for years and years to come,” said Tony Mercurio, National Interstate’s chief executive officer.
“It’s truly a physical display of growth and prosperity,” he said. “We need the space. ... It’s really going to be an attractive place to come work.”
Richfield Mayor Bobbie Beshara said National Interstate’s growth is important to the village in numerous ways.
The company has been in Richfield for more than 15 years and the company’s presence attracts the attention of other businesses, she noted. National Interstate also is an important source of income tax revenue, she said.
“They are finding our community to be their home and they want to stay in Richfield,” Beshara said. “They’ve added so much to Richfield over the last several years. ... We’re very very pleased with what’s happening today.”
In the other news of the day, National Interstate and American Financial Group’s Great American Insurance Co. subsidiary consummated a $32 per share buyout the businesses agreed to in late July. That worked out to about $311 million and valued National Interstate at $660 million.
National Interstate sells insurance for passenger, truck, and moving and storage transportation companies, recreational vehicle owners, and others.
American Financial Group, also known as AFG, had owned 51 percent of the company’s shares. As part of the buyout, National Interstate paid a special cash dividend of 50 cents per share on Thursday.
Mercurio said it will be business as usual at National Interstate, which will retain its name, employees, business plan and more. The new parent company believes in autonomy for its businesses, he said.
“I’ve had Nov. 10 circled on my calendar for a long time,” Mercurio said. “Truly, two milestone moments for National Interstate today. ... If anything, this will enhance our opportunity to attract local talent.”
Alan Spachman, 69, who founded National Interstate in 1989, was at Thursday’s event and noted this was his last day as a board member of the company. He has a home in Hudson and in Florida.
“It’s just a wonderful day to see what I was involved with get bigger and better,” Spachman said. He said when he created National Interstate, he anticipated it would succeed and expand.
“And we did,” he said. “It’s been everything I hoped for. It’s been very good to me, my family and the people who work here. It’s been a success. ... I think the company’s been a good neighbor and a good addition to the community.”
This was American Financial Group’s second effort to purchase all of National Interstate. The first attempt in 2014 was withdrawn following pushback from prominent shareholders.
Spachman said the second attempt succeeded in part because it was more pleasant and respectful. The end result was shareholders and American Financial each got what they hoped for, he said. Spachman said he will retire while remaining an investor in AFG.
“This is my last official day at [National Interstate],” Spachman said. “It’s the beginning of a new era, a new era for the company and a new one for me. We have new owners now and they are very accomplished owners. And they’ll take this business to a new phase. I’m confident they will.”
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ