Specialty insurer ProSight Global, Inc. is to be acquired by affiliates of international investment management firm, TowerBrook Capital Partners L.P. and Further Global Capital Management, a private equity firm with a focus on the financial services industry.
Affiliates of TowerBrook and Further Global have signed a definitive merger agreement to acquire all of the outstanding shares of common stock of ProSight Global in an all-cash transaction valued at $586 million.
The agreement sees ProSight stockholders receive $12.85 per share of common stock, which translates to a 42% premium to the closing share price as on Sep 23rd, 2020.
Under the terms of the arrangement, TowerBrook is set to acquire a majority stake in the domestic specialty insurer, with Further Global serving as a key minority co-investor.
Once the deal completes, Jonathan Ritz will become Chief Executive Officer (CEO), while Larry Hannon, current President and CEO of ProSight, will continue to serve as President.
Ritz joins the firm after previously serving as President of Bermuda-based Aspen Insurance Holdings Limited; Chief Operating Officer (COO) of Validus Holdings Limited; and CEO of Validus Specialty.
Upon closing, ProSight will become a private company with the flexibility and capital to accelerate its next phase of growth. Ritz and Hannon will work together with both TowerBrook and Further Global to continue ProSight’s development and strategic realignment.
Ritz commented: “This is a very exciting and challenging insurance market which is undergoing significant changes in distribution, pricing, capital management, and capacity exiting across many lines of business.
“Increased frequency and magnitude of natural catastrophes, social inflation, and the COVID-19 crisis have contributed to substantial market dislocations, and ProSight represents a quality platform that is well-positioned to capitalize on this environment. I am looking forward to working with the Company’s many talented underwriters, employees, and distribution partners to build a market-leading specialty insurance company.”
It’s been reported that the agreement was recommended by a special committee of the ProSight Board of Directors, and was later approved by ProSight’s full Board.
The deal is expected to close in the third-quarter of this year, but remains subject to customary closing conditions, which includes the finalisation of a reinsurance transaction with Enstar designed to reposition ProSight’s capital in support of future growth.
Hannon said: “This transaction and the new partnership with TowerBrook and Further Global will expand ProSight’s underwriting capabilities and fund investments in talent and technology that will improve our offerings to distribution partners and customers.
“Since our founding 12 years ago, our employees have dedicated themselves to creating a differentiated specialty insurance company. I’m very proud of what we created, thank them for their dedication, and very much look forward to working closely with Jonathan as we write ProSight’s next chapter as a private company.”
According to TowerBrook and Further Global, the acquisition of ProSight is the result of a targeted approach to the insurance sector.
Law firm Sidley Austin LLP is representing TowerBrook and Further Global in their acquisition of ProSight Global, Inc.
ProSight was founded in 2009 and operates as a property and casualty insurer writing a diverse mix of admitted and non-admitted specialty lines in all 50 states.