Bermuda-based runoff management specialist Enstar Group Limited announced Wednesday that it has entered into definitive agreements with Arden Holdings Limited to acquire Atrium Underwriting Group Limited and Arden Reinsurance Company Limited.
The purchase price for Atrium will be approximately $183.0 million and the purchase price for Arden Reinsurance will be approximately $79.6 million.
Atrium is an underwriting business at Lloyd’s of London, which manages Syndicate 609 and provides approximately one quarter of the syndicate’s capital. Atrium specializes in accident and health, aviation, marine property, non-marine property, professional liability, property and casualty binding authorities, reinsurance, upstream energy, war and terrorism insurance, cargo and fine art.
Arden Reinsurance is a Bermuda-based reinsurance company that provides reinsurance to Atrium and is currently in the process of running off certain other discontinued businesses.
Enstar said completion of each transaction is conditioned on governmental and regulatory approvals and satisfaction of various customary closing conditions. The two transactions are governed by separate purchase agreements and the acquisition of each company is not conditioned on the acquisition of the other, the group added in a statement.
Both transactions are expected to close by the end of the fourth quarter of 2013.
In a media statement, Dominic Silvester, Enstar’s Chief Executive Officer, said: “The acquisition of Atrium’s ‘live’ underwriting platform will represent a further evolution of Enstar’s business. Our core focus remains on acquiring insurance and reinsurance companies that are in run-off, however we believe Atrium will provide us with a high quality operation at Lloyd’s that includes a skilled underwriting and management team that will help create new opportunities for us to grow and prosper.”
Steve Cook, Chief Executive Officer of Atrium, said that Atrium intends to continue its existing strategy and plans under Enstar’s ownership.
Enstar, a Bermuda company, acquires and manages insurance and reinsurance companies in run-off and portfolios of insurance and reinsurance business in run-off, and provides management, consultancy and other services to the insurance and reinsurance industry.
Arden was founded as Ariel Holdings Ltd. (“Ariel”) in 2005 as a Bermuda-based catastrophe reinsurer in the aftermath of Hurricanes Katrina, Rita and Wilma.
Ariel was initially capitalized with approximately $1.0 billion from leading global private equity firms, including: The Blackstone Group, Texas Pacific Group, Thomas H. Lee Partners, Oak Hill Capital Partners, Olympus Partners, affiliates of Bain Capital, SAB Capital and Eton Park Capital Management.
In April 2012, Arden completed the sale of its Bermuda-based insurance and reinsurance operations to the Goldman Sachs Group, Inc. and the sale of its Zurich-based credit and surety operations to Arch Capital Group Ltd.
The sales of Atrium and Arden Reinsurance represent the disposition of Arden’s remaining operating businesses.
Source: Enstar Group; Arden Holdings