Enstar enters exchange agreement with Stone Point Capital to increase its position in StarStone US

Enstar Group has entered an exchange agreement with Trident V and its affiliated funds, managed by Stone Point Capital.

The transaction will see Enstar acquire a greater share in StarStone US Holdings, a property and casualty insurer, with the Trident V funds owning a greater share in the holding company for Atrium Underwriting Group. The deal is subject to regulatory approvals.

The transaction is conditioned upon the closing of the previously announced recapitalisation of StarStone US, pursuant to which a new management team and board of directors will be appointed. New investors will be brought in to increase StarStone US’ total equity capitalisation to over $850 million, with an Enstar subsidiary reinsuring legacy reserves.

Enstar will acquire all of the Trident V funds’ interest in the recapitalised StarStone US, and will own approximately 26 percent of StarStone US following the completion of the recapitalisation and exchange transactions.

The Trident V funds will receive a portion of Enstar’s indirect interest in Northshore Holdings, the holding company for Atrium, increasing its indirect ownership interest to approximately 80 percent, up from approximately 36 percent.

Enstar’s position will be reduced to approximately 11 percent, down from around 54 percent, and it will retain one Northshore Holdings board seat.

The Trident V funds continue to own approximately 9 percent of Enstar Group’s ordinary voting shares.

Dominic Silvester, Enstar’s chief executive officer, said Enstar will remain invested in high-quality live underwriting businesses with proven leadership, such as Atrium and StarStone US, through meaningful minority stakes and alongside trusted equity partners.

“This transaction deepens our successful relationship with Stone Point, which has been a valued partner of Enstar for two decades,” he added.

Chuck Davis, Stone Point’s chief executive officer, said Atrium “is led by an outstanding management team that has a long-term track record of producing underwriting profits.”

Richard Harries, Atrium’s chief executive officer, added: “Atrium has thrived under the joint ownership of Enstar and Stone Point. This change, which will have no operational impact on Atrium, is a further vote of confidence in the Atrium team.”