Validus Holdings and Flagstone Reinsurance have inked a deal, in accordance with which the former will acquire all of the issued and outstanding shares of Flagstone in a move to strengthen Validus’ leading property catastrophe reinsurance and short-tail specialty reinsurance platform.
As per the acquisition pact, Flagstone shareholders will receive 0.1935 Validus voting common shares and $2.00 in cash for each Flagstone share.
The transaction offers Flagstone shareholders with a 19.4% premium and $8.43 of value per share based on the closing share price for each of Validus and Flagstone.
For US tax purposes, the proposed transaction is expected to be tax-free to Flagstone shareholders with respect to the Validus voting common shares they receive.
The transaction is expected to close in the fourth quarter of 2012, after obtaining required regulatory approvals, the underwriter said.
Validus chairman and chief executive officer Ed Noonan said the transaction will allow Validus to further build upon its market leading position in catastrophe risk.
"Validus has an established track record of integrating acquisitions quickly and effectively with a focus on the needs of our clients and intermediaries," Noonan added.
Deutsche Bank Securities offered financial advice to Validus and Skadden, Arps, Slate, Meagher & Flom catered legal counseling, while Evercore Partners served as financial advisor to Flagstone and Cravath, Swaine & Moore offered legal advice.