Maiden Holdings and Kestrel Group have agreed to a merger, which will help set up a new publicly listed specialty programme group.
As per the agreed terms, Maiden’s common shares will be converted into the right to secure shares in a new Bermuda-based entity, which will acquire both Maiden and Kestrel.
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This deal assigns a value of up to $167.5m to Kestrel, comprising $40m in cash, 55 million common shares of the new company valued at $82.5m, and an earnout of up to $45m payable in common shares.
The merged entity will operate under the name Kestrel Group, with its shares to be listed on Nasdaq.
The leadership team for the merged group will include Luke Ledbetter as CEO, Terry Ledbetter as executive chairman, and Pat Haveron as president and CFO.
Post-merger, Kestrel will maintain its business through A.M. Best A- FSC XV insurance carriers, which are subsidiaries of AmTrust Financial Services.
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By GlobalDataAdditionally, the combined company will have the option to acquire these insurers from AmTrust.
The board of directors for the new entity will comprise seven members, with four selected by an affiliate of the Ledbetters, including two independents, and three chosen by AmTrust, including two independents.
The completion of the deal is anticipated in the first half of 2025, contingent upon several conditions such as approval from Maiden shareholders, the expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, Nasdaq listing approval, and other regulatory clearances.
Insurance Advisory Partners is the financial advisor to Maiden for the deal, with Paul, Weiss, Rifkind, Wharton & Garrison providing legal counsel.
Appleby is advising the disinterested members of Maiden’s Board. Kestrel is receiving financial advice from Evercore, while Skadden, Arps, Slate, Meagher & Flom is handling its legal matters.
Maiden CEO and CFO Pat Haveron said: “The Ledbetters and the broader Kestrel team have a long and proven track record of success in the specialty programme market, and we look forward to partnering with them to deliver value to programme managers, MGAs, reinsurers and reinsurance brokers across a range of attractive specialty lines.”
Kestrel president and CEO Luke Ledbetter stated: “The combination with Maiden will allow us to accelerate our growth plan and capitalise on favourable market tailwinds as we continue our efforts to become the leading specialty programme group in the United States.”
