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Fairfax to sell RiverStone Europe to CVC in $750m transaction

2nd December 2020 - Author: Luke Gallin

Fairfax Financial Holdings Limited has reached an agreement to sell all of its interests in RiverStone Europe to CVC Strategic Opportunities Fund II, a vehicle owned and operated by CVC Capital Partners, for a purchase price of USD 750 million.

handshakeAt the same time, it’s been announced that OMERS, the pension plan for Ontario’s municipal employees, has also agreed to sell all of its interests in legacy specialist RiverStone Europe as part of the deal.

Alongside the purchase price of USD 750 million, Fairfax will also be entitled to receive up to USD 235.7 million post-closing under a contingent value instrument.

Luke Tanzer, Managing Director of RiverStone Europe, will remain in his post as Nick Bentley, the Chief Executive Officer (CEO) of the RiverStone Group, continues to serve on the board of RiverStone Europe once the deal completes.

Following the transaction, RiverStone Europe will operate under the name RiverStone International and will look to continue its successful track record of acquisitions and growth led by its existing management team.

RMS

Prem Watsa, Chairman and Chief Executive Officer (CEO) of Fairfax, commented: “We are very pleased to enter into this transaction with CVC.

“RiverStone Europe is an industry leader in run-off insurance services, and CVC’s scale and vision will give RiverStone Europe, under the continued leadership of Luke and his management team, the opportunity to further grow the business. Nick and Luke are also fully supportive of this transaction, based on their strong beliefs that it was the best way for RiverStone Europe to continue to grow and pursue run-off transactions.

“We wish Luke and all of the employees at Riverstone Europe much success in the future. Fairfax remains committed to continuing to grow its other European businesses, including its Lloyd’s of London activities.”

Tanzer added: “I am extremely happy to partner with CVC in this next chapter of our development. This transaction will provide us with a runway for further growth as we continue to offer the most trusted and effective run-off solutions in the insurance market. We look forward to joining the CVC family and benefitting from their deep experience of financial services, global network and long term pool of capital.”

While Peter Rutland, Managing Partner and Head of Financial Services at CVC, said: “As one of the largest global consolidators of non-life run off insurance books, with a leading position in the UK and Lloyd’s market, embedded cash flows and a predictable financial profile, RiverStone Europe is ideally suited to CVC’s Strategic Opportunities platform, which specializes in backing established businesses in stable markets that have long term growth ambitions.

“We have got to know RiverStone and Fairfax over many years, and are delighted to now have the opportunity to work with Luke Tanzer and his experienced team.”

The deal is expected to close in early 2021, and remains subject to customary closing conditions, including regulatory approvals.

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