Bermuda based insurance, reinsurance and run-off specialist Enstar Group Limited has retained investment bankers to explore a potential sale of its active underwriting businesses.
In a move clearly designed to test the market’s appetite for another pricey M&A deal, Enstar said that recent transactions led to the decision to find out what it could get for its Atrium Underwriting and StarStone entities.
Enstar and fellow investor Stone Point Capital LLC, whose Trident V funds it partnered with in the acquisition of Atrium and StarStone in the first place, said in a filing that they have retained Evercore Group L.L.C. to help in evaluating market appetite and interest for the units, should the pair decide to put them up for sale.
With Enstar’s core business being in realising value of legacy books and investing now, it is perhaps no surprise that the company would be willing to sell on its active underwriting units should the right price be offered.
Enstar said that it and Stone Point came to the decision to engage investment bankers given their perception of favorable market conditions, which the firm said is following several other recent transactions in the industry.
Recent M&A multiples have shown that attractive pricing can be gained for sales of active underwriting businesses with a good track record and access to risk.
As a result, the investment bank will be tasked with exploring whether there is interest in Atrium and StarStone at attractive pricing levels, Enstar’s filing said, which implies that there won’t be a sale at any cost but if the right buyer is found it would be happy to offload them.
Enstar said that it cannot predict whether or when any sale of Atrium or StarStone will occur.
