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Enstar in $91.5m legacy asbestos & environmental liability acquisition

2nd January 2017 - Author: Steve Evans

Bermuda based insurance, reinsurance and run-off specialist Enstar Group has made a $91.5 million acquisition of Dana Companies, LLC for its legacy asbestos and environmental liabilities.

Dana Companies was part of Dana Incorporated, a world leading supplier of highly engineered drivetrain, sealing, and thermal-management technologies for vehicles.

As a result of its operations Dana Companies holds significant legacy liability risks, that suit Enstar’s legacy and run-off management expertise, allowing the firm to put its insurance and reinsurance capital to work, alongside its expertise in managing liabilities through to run-off.

The liabilities held by Dana and now acquired by Enstar in this $91.5 million deal are associated with personal injury asbestos claims and environmental claims due to its legacy manufacturing operations.

Assets owned by Dana Companies include, among others, insurance rights related to coverage against these liabilities and also marketable securities. Enstar financed the acquisition using its revolving credit facility.

Dominic Silvester, CEO of Enstar, commented on the acquisition; “The Dana Companies acquisition complements our core business of managing legacy liabilities and our specific expertise in asbestos, and we are pleased to have worked with Dana to provide an effective resolution to the asbestos liabilities arising from historic operations.  This is the first time Enstar has acquired a company outside of the insurance industry, demonstrating our ability to deliver legacy and capital release solutions to this broader market sector as we continue to grow our business.”

By acquiring the legacy liabilities Enstar will hope to manage them through to run-off more effectively, to extract any premium profit while also leveraging the float associated with the risks.

Source: Globe Newswire.

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