Enstar to be sold for $5.1 billion
Leading Bermuda legacy re/insurer Enstar Group is to be bought by US private equity firm Sixth Street for $5.1 billion.
Enstar said it will continue to run as a standalone business but will cease being a publicly traded company.
The purchase of the company, for a a total of $338.00 in cash per ordinary share, represents an 8.5% premium over the company’s trading price.
In addition to Sixth Street, other institutional investors participating in the buyout include Liberty Strategic Capital and JC Flowers & Co..
Following the close of the transaction, Enstar will maintain its current operations and business strategy, the companies said.
“Over the past 30 years, Enstar has built a strong position in the legacy market founded on our exceptional scale and track record, pricing and claims expertise, and entrepreneurial culture,” said Enstar’s founder and chief executive officer Dominic Silvester. “This transaction provides a full liquidity event for shareholders and is a testament to the strength of our team. We believe this is the best next step for our shareholders and we look forward to this exciting new chapter.”
"Enstar has a proven track record of delivering innovative legacy P&C solutions and capitalising on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture,” said Michael Muscolino, co-founder and partner at Sixth Street. “As an existing investor in Enstar, we have a deep respect for the business Enstar’s management team has built and look forward to continue supporting the Company’s current strategy.”
The transaction, which has been unanimously approved and recommended to its shareholders by Enstar’s Board of Directors, is expected to close in mid-2025, subject to approval by Enstar’s shareholders, regulatory approvals, and other customary closing conditions.
The definitive agreement provides that Enstar will undertake a series of transactions in which Enstar shareholders will receive $338.00 in cash per ordinary share of Enstar. The transaction is fully financed, with the full amount of equity being provided by Sixth Street, together with its co-investors, and Enstar agreeing to return approximately $500 million from its balance sheet to its shareholders as part of the total $338.00 in cash per ordinary share received by shareholders of Enstar.
The agreement includes a 35-day "go-shop" period expiring on September 2, 2024, which permits Enstar's board ofdDirectors and advisors to solicit alternative acquisition proposals from third parties.
“There can be no assurance that this ‘go-shop’ will result in a superior proposal, and Enstar does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or is otherwise required. Enstar will have the right to terminate the merger agreement to enter into a superior proposal both during and after the “go-shop” period, subject to the terms and conditions of the merger agreement.”
Enstar is a NASDAQ-listed leading legacy insurer operating in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Enstar has acquired more than 117 companies and portfolios since its formation in 2001.
Sixth Street ihas over $75 billion in assets under management and committed capital. Founded in 2009, Sixth Street has 600 team members including over 200 investment professionals operating around the world.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
