Stonetrust Commercial Mutual Insurance Holding Co., a Baton Rouge company doing business in five states, is being acquired for $35 million by Dhandho Holdings LP and Dhandho Holdings Qualified Purchaser LP, based in Irvine, California.

Stonetrust is the parent company of Stonetrust Commercial Insurance Co., which provides workers’ compensation and employers’ liability insurance coverage to more than 5,100 policyholders in Louisiana, Mississippi, Arkansas, Oklahoma and Texas.

The cash acquisition will include Stonetrust Commercial Mutual Insurance Holding Co., Stonetrust Commercial Insurance Co. and Stonetrust Realty LLC, as well as Stonetrust Management Services LLC, the independently owned managing general agent.

Founded in 1993, Stonetrust’s business is concentrated in construction, wholesale, retail, manufacturing and other service-related businesses.

The Stonetrust companies will become subsidiaries of a new stock holding company created by the Dhandho partnership. Stonetrust operations will remain unchanged and continue to be headquartered in Baton Rouge under current President and CEO Tim Dietrich.

The transaction, which has been approved by the board of directors of Stonetrust Commercial Mutual Insurance Holding Co., is expected to be completed within 90 days. The conversion plan will require approval of policyholders and the Louisiana Department of Insurance. Proceeds of the transaction will be paid to eligible policyholders.

Dhandho also has agreed to put $30 million into Stonetrust Commercial Insurance Co., doubling its surplus to more than $60 million and providing a boost to its premium-to-surplus ratio.

Stonetrust anticipates the additional capital will facilitate its expansion plans and help the company achieve its goal of an A rating by the global credit rating agency A.M. Best. Stonetrust is rated B++.

“Our plan is for continued profitable growth, added insurance line development and geographic expansion in the central and southeastern regions of the U.S.,” Dietrich said. “This transaction with Dhandho provides us with a substantial source of capital, enabling us to take advantage of new business opportunities whenever they should arise.”