International General Insurance Holdings (IGI), the specialist commercial re/insurer, has entered into a business combination agreement with special purpose acquisition firm Tiberius Acquisition Corp., which will result in the public listing of IGI.
The agreement prices IGI at approximately 1.26x its book value of $316 million (as of June 30, 2019), implying a total deal value of roughly $398 million.
Under the terms of the transaction, IGI and Tiberius will combine under a new holding company to be domiciled in Bermuda, called International General Insurance Holdings Limited, Bermuda (IGI Holdings).
Subsequently, IGI Holdings will be listed on the Nasdaq Capital Market under the symbol IGIC, with expected pro forma market capitalisation of $550 million.
Following the listing, IGI’s senior management will continue to serve in their current roles and fulfil long-term employment contracts, with Vice Chairman and CEO Wasef Jabsheh owning approximately 24% of the company.
Michael Gray, CEO and Chairman of Tiberius, and Andrew Poole, Chief Investment Officer of Tiberius, will serve as board members of the combined company.
“I am very proud of IGI’s accomplishments over the past 17 years as a client-focused and underwriting-first worldwide specialty (re)insurer with a demonstrable track record of superior results,” said Jabsheh.
“Entering the public markets as a scaled, publicly-traded, pure-play specialty commercial (re)insurer enhances our ability to continue to prudently grow our business and compound tangible book value by delivering low-volatility returns,” he continued.
“I am particularly pleased that I will continue to personally own a meaningful part of this company and oversee the next phase of IGI’s growth as a public company while maintaining the key tenets of the culture that has made IGI successful since inception. IGI will always deliver world class service to our clients while driving long-term total value creation for our shareholders.”
“The acquisition of IGI is perfectly aligned with our objectives,” added Gray. “Since inception, IGI has had an enviable track record of growth in tangible book value per share through high-quality and low-volatility ROE, cycle management, its conservative reserving philosophy and a unique ability to benefit from changes in the property casualty insurance cycle.”
“Recent catastrophic events during 2017 and 2018 along with the low interest rate environment globally are driving rate momentum in the global (re)insurance market,” he explained.
“The time for IGI to enhance its capitalization and access to low cost capital to take advantage of these conditions is ideal and we look forward to participating in the company’s future success as significant investors and providing our experienced investment management and public market perspectives to drive further value creation going forward.”
This transaction is expected to close in Q1 2020 and add approximately $120 million of equity to IGI’s balance sheet to support its core specialty (re)insurance business and enable IGI to take advantage of attractive market conditions
Tiberius plans to fund the deal through a combination of cash in its trust account, forward purchase commitments, and proceeds from a common stock private placement led by premier institutional investors
Waleed Jabsheh, President of IGI, also commented: “As a recognized leader in non-US (re)insurance commercial property casualty markets and one of the preeminent MENA underwriters in the world, IGI has a global platform and infrastructure that provides a service-focused approach for clients and will enable new shareholders to take advantage of current market conditions.”
He further stated: “This transaction will allow IGI to continue to execute its organic growth plan through expanding capacity and relationships in its core Afro-Asian, European and Latin American markets, maintain high levels of capital adequacy, enhance its credit ratings over time, and facilitate its potential entry into the US excess and surplus (E&S) markets.”
IGI’s business consists of 17 lines spanning specialty and niche products in more than 200 countries, with a strategy focused on selective expansion into new specialty lines and markets, including a potential entry into the US E&S markets.