Owners of United Insurance Holdings LC in St. Petersburg will receive $25 million in cash and 8.75 million shares of FMG Acquisition Corp. under terms of a merger agreement.

FMG (OTCBB: FMQ), a special purpose acquisition company in Farmington, Conn., will change its name to United Insurance Holdings Corp. after completing the purchase of the LC, likely in the second quarter of this year, a release said. The newly merged company will seek a listing on the American Stock Exchange or NASDAQ.

United's the senior management will remain unchanged following the transaction. Greg Branch is chairman, and Donald Cronin is president and chief executive.

Gordon Pratt, chairman, president and chief executive of FMG, will become vice chairman of United Insurance Holdings Corp., and each company will name three of the six board members of the merged firm.

United, established nine years ago, has about 73,000 homeowners insurance polices in Florida with $145 million in annual gross premium and $85.4 million in net premiums earned in 2007, the release said. The company posted $39.6 million in net income in 2007, compared to $17.2 million in net income in 2006 and $1.1 million in net income in 2005.

---------------------------------------------------------------------------------------------

© American City Business Journals Inc. All rights reserved