Enstar joins with MDP and Evergreen Parent in AmTrust share deal

Evergreen Parent has signed a share purchase agreement with Bermuda-based Enstar Group and US private equity firm Madison Dearborn Partners (MDP).

Evergreen Parent was created from private equity funds managed by Stone Point Capital and the Karfunkel-Zyskind Family and has signed the agreement with an entity affiliated with Enstar Group and MDP.

Under the terms of the deal, Enstar and MDP will participate in a portion of the previously disclosed take-private purchase of approximately 45 percent of the issued and outstanding shares of common stock of AmTrust Financial Services, that the Karfunkel-Zyskind Family and certain of its affiliates and related parties do not presently own or control.

As a result MDP and Enstar will each own a minority equity position in AmTrust once the take-private transaction is completed, with Stone Point and the Karfunkel-Zyskind Family owning the balance.

Subject to the terms and conditions of their respective agreements with Evergreen, MDP and Enstar will collectively contribute a total of $350 million to Evergreen in exchange for equity interests in Evergreen to partially fund a portion of the take-private transaction of AmTrust. The previously disclosed equity commitments of an investment fund affiliated with Stone Point and an investment entity controlled by the Karfunkel-Zyskind Family in the take-private transaction, will be reduced proportionately as a result of the participation by MDP and Enstar in the equity financing.

The proposed transaction values the fully diluted equity of AmTrust at approximately $2.95 billion, excluding AmTrust's outstanding preferred stock. The take-private transaction was approved by AmTrust's stockholders on June 21, 2018, and is expected to close during the second half of 2018, subject to the satisfaction of customary closing conditions, including approval by regulatory authorities.

“We are pleased to partner with the Karfunkel-Zyskind Family, Stone Point, and MDP in this investment opportunity, and believe that AmTrust will benefit from this combination of experienced investors,” said Dominic Silvester, director and chief executive officer of Enstar Group.

“We are excited to join with Enstar, the Karfunkel-Zyskind Family, and Stone Point and have the opportunity to invest in AmTrust itself. Following our acquisition earlier this year of a number of AmTrust's US fee businesses, which is now called The Amynta Group, we have come to know AmTrust and the management team well,” said Vahe Dombalagian, a managing director on the MDP Financial & Transaction Services team. “With this investment we are confident in AmTrust's ability to continue serving its partners, brokers, agents and clients through innovation and service excellence.”