Bermuda-based re/insurance, run-off and legacy specialist, Enstar Group Limited, has announced that its Enstar Holdings (US) LLC division has acquired BorgWarner Morse TEC, LLC (Morse TEC) from BorgWarner Inc.
This the second time that Enstar has purchased a non-insurance company, following its $91.5 million acquisition of Dana Companies, LLC for its legacy asbestos and environmental liabilities almost three years ago.
BorgWarner is described as a global product leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles. And today, Enstar has announced the acquisition of its wholly owned subsidiary, Morse TEC.
Currently, Morse TEC holds approximately $0.8 billion in liabilities associated with personal injury asbestos claims and environmental claims arising from the legacy manufacturing operations of its parent.
According to an announcement on the deal, Morse TEC’s assets include, among others, insurance rights related to coverage against these liabilities and cash and marketable securities.
Enstar’s Chief Executive Officer (CEO), Dominic Silvester, commented on the deal: “Enstar continues to provide market-leading legacy solutions for large corporates and their historic liabilities. This is our second acquisition of a non-insurance company and we see a growing potential market here as we expand our business.”
This is an interesting acquisition for Enstar, acquiring legacy asbestos and environmental liabilities that suit the firm’s expertise in the legacy and run-off arena. By acquiring the legacy liability risks of Morse TEC, Enstar will look to manage the liabilities through to run-off more effectively, hopefully resulting in premium profit for the company.