White Mountains to acquire a majority stake in Ark Insurance
White Mountains Insurance Group will acquire a majority interest in Ark Insurance Holdings and inject $605 million of equity capital into the company at a pre-money valuation of $300 million, in a move aimed to significantly grow the business.
Ark will use the money to convert its existing Bermuda reinsurance entity into a Class 4 reinsurer, and to hire talented underwriters in both Bermuda and London.
It will also increase the aligned capacity at its Lloyd's syndicates to 100 percent, and increase its overall stamp capacity, with currently stands at approximately $500 million.
White Mountains will purchase $41 million of shares from existing owners and has committed to contribute up to an additional $200 million of equity capital in 2021. Total post-closing capitalisation will exceed $800 million, and will exceed $1 billion if the additional $200 million is contributed in full.
At closing, White Mountains will own 72 percent of Ark on a basic shares outstanding basis. If the additional $200 million is contributed in full, White Mountains will own 77 percent of Ark on a basic shares outstanding basis. All shares outstanding not owned by White Mountains will be owned by management rollover shareholders.
White Mountains expects the transaction to close in January 2021.
Ark Insurance Holdings is the ultimate parent company of Ark Syndicate Management, which underwrites a diversified and balanced portfolio of reinsurance and insurance, including property, accident and health, energy, marine and political risks.
Manning Rountree, chief executive of White Mountains, described Ark as “a high-quality insurance business that puts underwriting first.”
Slaughter and May acted as legal advisor to White Mountains, while Willkie Farr & Gallagher acted as legal advisor to Ark. Evercore and TigerRisk Capital Market & Advisory acted as financial advisors to Ark.
