Ambac Financial Group has reached a deal to acquire a 60% stake in Beat Capital Partners (Beat) in a cash-stock deal worth nearly $282m.
Based in London, Beat is an insurance underwriting and MGA incubation platform.
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Ambac will purchase the majority stake from current shareholders including Bain Capital and Beat’s management team.
Both Bain Capital and Beat’s management will each retain a 20% equity interest in the company.
Since its establishment in 2017, Beat has launched 13 underwriting franchises and MGAs.
It has also managed rights for Syndicates 4242 and 1416 at Lloyd’s, and maintained an exclusive capacity relationship with Bermuda reinsurer Cadenza Re.
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By GlobalDataBeat’s businesses generated $533m in gross premiums and around $17m in EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2023.
John Cavanagh, partner and chairman of Beat, will continue to steer the company within the senior leadership team.
The acquisition, which awaits regulatory approvals, is slated for completion in the third quarter (Q3) of 2024 and will be funded through available cash and committed financing.
Ambac president and CEO Claude LeBlanc said: “This acquisition propels Ambac to the forefront of the specialty programme insurance market. We are not simply acquiring a leading specialty underwriting platform; we are aligning with a team that has proven ability to build and launch profitable de novo MGAs, which is a core pillar of our growth strategy. Adding Beat to our platform gives us immediate scale and a strong pipeline to fuel future growth.”
In a separate deal, Ambac agreed to sell its legacy financial guarantee businesses, Ambac Assurance Corporation and Ambac UK, to Oaktree Capital Management for $420m in cash.
This sale is also contingent on regulatory and shareholder approvals and is expected to conclude between Q4 2024 and Q1 2025.
LeBlanc added: “Three years ago, we announced our vision and strategy to transform Ambac into a specialty property and casualty [P&C] insurance platform.
“The sale of our legacy financial guarantee business is the final step in that transition, and it enables us to focus solely on building a profitable P&C platform that will continue to deliver long-term value for our shareholders.”
