A consortium led by financial services company Sixth Street has formalised a definitive merger agreement to acquire Bermuda-based insurer Enstar Group.
The transaction values the business at $5.1bn, with Enstar shareholders set to receive $338 in cash per ordinary share upon closing.
Go deeper with GlobalData
This reflects an 8.5% premium to Enstar’s 90-day volume-weighted average price and a 6.9% premium to the 60-day average, as of 26 July 2024.
Sixth Street is fully financing the deal in collaboration with its co-investors.
Liberty Strategic Capital and J.C. Flowers & Co, and some other institutional investors are also participating in the transaction.
Enstar’s board has unanimously approved the deal, which is expected to close in mid-2025.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe deal now awaits regulatory and shareholders’ clearances.
As part of the agreement, Enstar has initiated a 35-day “go-shop” period, until 2 September 2024, allowing for the solicitation of alternative proposals from other third parties.
However, there is no guarantee that this will result in a superior offer, the companies noted.
The insurance company will not disclose developments regarding this process unless deemed appropriate or required.
Meanwhile, Enstar can terminate the merger agreement to pursue a better proposal both during and after the “go-shop” period, as outlined in the agreement’s terms and conditions.
Upon completion, Enstar will become a privately held company, maintaining its current operations and business strategy.
The insurer’s common stock will be delisted from public trading.
Enstar CEO Dominic Silvester said: “This transaction provides a full liquidity event for shareholders and is a testament to the strength of our team. We believe this is the best next step for our shareholders and we look forward to this exciting new chapter.”
Goldman Sachs & Co, Paul, Weiss, Rifkind, Wharton & Garrison, and Hogan Lovells are advising Enstar on the transaction.
Sixth Street’s advisors include Ardea Partners, Barclays, Cleary Gottlieb Steen & Hamilton, Debevoise & Plimpton, J.P. Morgan Securities and Simpson Thacher & Bartlett.
Sixth Street co-founder and partner Michael Muscolino said: “Enstar has a proven track record of delivering innovative legacy P&C [property and casualty] solutions and capitalising on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture.
“As an existing investor in Enstar, we have a deep respect for the business Enstar’s management team has built and look forward to continue supporting the company’s current strategy.”
Separately, Enstar has reported net income of $126m for the second quarter (Q2) of 2024, an increase from $21m in the previous year.
The company’s revenues for the quarter ending 30 June 2024 were $236m, up from $154m in Q2 2023.
