Bermuda based Enstar has embarked a definitive agreement with HSBC Finance, pursuant to which the former will acquire all of the shares of Household Life Insurance Company of Delaware and HSBC Insurance Company of Delaware, from Household Insurance, an affiliate of HSBC.
According to the acquirer, the firms being purchased have written various US and Canadian life insurance, such as credit insurance, term life insurance, assumed reinsurance, corporate owned life insurance, and annuities.
As per the purchase agreement inked, Enstar anticipates to finance the purchase price through cash on hand and a drawing under its revolving credit facility.
The cumulative base purchase price of $181m will move forward under the terms of the stock purchase agreement based upon changes to the capital and surplus of the acquired entities arising from the operation of the business prior to closing.
Commenting on the deal, Enstar chief executive officer Dominic Silvester said whilst the company’s core focus leftovers on non-life property and casualty run-off, it is pleased to further expand its portfolio of run-offs with this acquisition of closed-life insurance business from HSBC.
"We have been studying closed-life insurance for a number of years – including through our small acquisition of Laguna Life Limited in 2011 – and we have expanded our knowledge and understanding of this business, which we see as an enhancement to our global run-off strategy," Silvester added.
The deal is expected to complete by the end of the first quarter of 2013, after receiving the concerned regulatory approval and satisfying various closing conditions.
Enstar Group buys and manages insurance and reinsurance companies in run-off and offers management, consulting and other services to the global insurance and reinsurance industry.