Argo Group International Holdings, the specialty re/insurer, has acquired Ariel Re, a Bermuda-based underwriter of re/insurance business owned by Banco BTG Pactual and the Abu Dhabi Investment Council, for approximately $235 million cash.
Ariel Re writes a global portfolio of insurance and reinsurance business through Lloyd's Syndicate 1910. The acquisition is expected to be complete during the first quarter of 2017.
Argo said the deal provides it with added diversification and improves its ability to manage changing market cycles.
"Ariel Re is a terrific fit for Argo Group - operationally and culturally. We remain focused on delivering enhanced shareholder value," said Mark Watson III, CEO of Argo Group. "This transaction enables us to build upon the successes realised individually by Argo Group and Ariel Re, utilising our combined strength to deploy capital in selected areas to produce maximum return and continued growth.
"Under the leadership of Jose Hernandez, head of Argo Group's International Business, the combination of Ariel Re and Argo Re will result in a market-leading business and will make a meaningful and immediate contribution to earnings and return on equity.
"This acquisition is part of Argo Group's strategic initiative to build scale in its London- and Bermuda-based platforms by adding complementary lines of specialty business. After the acquisition, Argo Group will have a well-balanced portfolio mix of approximately 88 percent insurance and 12 percent reinsurance,” added Watson.
Hernandez said: "Ariel Re is a group of proven insurance experts who rely on deep domain expertise, rigorous research and development, and innovative thinking - values and capabilities that align with those of Argo Group."
Ryan Mather, Ariel Re's CEO, said: "Argo Group have long been supporters of Ariel Re and we are delighted to take this relationship forward by bringing Ariel Re under the Argo banner. There is great synergy between the teams from both companies and we are looking forward to working together to strengthen the offering for our clients."
Argo Group, Bermuda, Ariel Re, Insurance, Reinsurance, Lloyd's, M&A, Ryan Mather, Investment, Jose Hernandez, Argo Re