Enstar Group has inked a definitive agreement to acquire global specialty insurer Torus Insurance Holdings in a cash and stock deal valued at nearly $692m, which runs six wholly owned insurance vehicles, including one Lloyd's syndicate.
Based on the agreement, the acquirer will issue nearly 1,901,000 ordinary voting shares and about 711,000 newly created non-voting preferred shares, with an aggregate value of around $346m to fund the transaction.
Further, it will also provide nearly $69m in cash towards the purchase price, while the remaining amount of $277m will be financed by affiliates of Stone Point Capital through an equity co-investment.
Following completion of the transaction by the end of the year, which is pending governmental and regulatory approvals and satisfying other customary closing conditions, Enstar will manage 60% of Torus and Stone Point will own 40%.
Enstar CEO Dominic Silvester said, "Torus provides us with an opportunity to acquire a large, international A- rated group of companies that both diversifies Enstar into the active market and enhances the opportunities available to our core legacy business."
Torus shareholders will receive all cash, while private equity firms First Reserve and Corsair Capital, Torus’ largest shareholders, will receive both Enstar shares and cash consideration in the transaction.
The acquirer also has entered into an amended and restated revolving credit facility for five years with National Australia Bank, Barclays Bank, and Royal Bank of Canada, under which it will receive $375m credit.
Bermuda-based Enstar purchases and admisnisters insurance and reinsurance companies in run-off and portfolios of insurance and reinsurance business in run-off, and provides management, consultancy and other services to the insurance and reinsurance industry.