Earlier today it was announced that Ambac Financial Group had signed a definitive agreement to acquire a 60% controlling stake in Beat Capital Partners Limited. This afternoon, a conference call was held which involved members of Ambac and Beat, discussing further details of the transaction.
During the call, Ambac’s President and Chief Executive Officer (CEO) Claude LeBlanc, said that the company is “thrilled” to enter into a partnership with both the founders of Beat and Beat Capital, both of whom will continue to hold a material stake in the business moving forward.
“One of the benefits of this acquisition is the immediate skill it offers,” LeBlanc said.
“In 2024, Cirrata and Beat on a pro forma basis will deliver combined results for an estimated $155 million of revenue and $40 million of EBITDA. Importantly, our combined book will grow to over $1 billion of gross written premiums and is on track to achieve EBITDA margins in the mid to high twenties.”
Also on the call, was John Cavanagh, Chairman and co-founder of Beat, who provided more context around the sale.
“This is an extremely exciting time for Beat,” he said. “Ambac brings stable ownership to our platform. We see Ambac’s well-established MGA incubation and carrier capabilities and its outstanding leadership team, who we’ve known for a while, as a perfect fit with our existing operations and team.”
A key factor to note, since it’s inception, Beat has launched 13 underwriting franchises and MGAs, two Lloyd’s syndicates, and a Bermuda reinsurer.
LeBlanc, added: “We are very excited to be partnering with the Beat team. Beat is not only a leading MGA platform, but a perfect fit for our strategic vision for the future of Ambac as a specialty P&C platform that is scaling for profitable growth.”
Furthermore, Ambac also announced earlier today that it has signed a definitive agreement to sell its legacy financial guarantee businesses, Ambac Assurance Corporation (AAC) and Ambac UK (AUK), to funds managed by Oaktree Capital Management, L.P. for $420 million in cash.
Commenting on the sale, LeBlanc said: “This transaction represents the realization of our objective to maximize the economic value of the legacy business, which has been in run-off since 2008. We believe this sale offers an optimal return on time and a risk adjusted basis.
“Further, Oaktree’s receipt of equity warrants in Ambac as part of this transaction is a vote of confidence in our go forth specialty P&C strategy. This divestiture also clarifies the future of Ambac while reducing our earnings volatility and uncertainty.
“We are now positioned as a pure place specialty P&C platform with a clear strategy for the future,” LeBlanc concluded.
