Specialist non-life insurance investor, service provider and underwriting manager, Randall & Quilter Investment Holdings, has signed a definitive agreement to acquire Global U.S Holdings Incorporated from AXA DBIO, a subsidiary of investment funds managed by AXA Liabilities Managers.
The deal will see R&Q acquire Global U.S Holdings’ insurance subsidiary Global Re U.S, which went into run-off in 2014, for a consideration of approximately $80.5 million.
This represents a small discount to the company’s current net assets. Global Re U.S will be managed by R&Q, which is a specialist in managing US asbestos, pollution and health hazard exposures.
Ken Randall, Group Chairman and Chief Executive Officer (CEO) of R&Q, noted that the transaction represented the company’s “largest legacy acquisition to date,” adding that it “demonstrates that we are gaining traction in larger sized deals.”
As of year end 2017, Global Re U.S reported total assets of $260 million, gross reserves of $146 million and $107 million of shareholders’ equity. In the year to December 2017, it made a profit of $15 million after tax.
During 2018, the company has distributed $25 million of its shareholders’ equity to an investment vehicle managed by AXA LM and has reported a small trading profit.
“R&Q is delighted to agree terms to acquire GLOBAL U.S. Holdings Incorporated,” continued Randall. “We are very experienced in managing portfolios of this nature which reflects our expertise in managing long-tail US liabilities.”
R&Q have stated that, from its own reserve assessment, the acquisition will generate a material gain for the group. It is expected to result in the group’s profit for full year 2018 being substantially ahead of market expectations.
“It is a significant legacy transaction for the Group and, with a continuing pipeline of further potential acquisitions, we anticipate an active second half of the year,” Randall added.
“Two weeks ago we announced our largest ever legacy reinsurance transaction providing a limit of $146m for a US based Risk Retention Group for a premium of approximately $108.5m.
“These transactions demonstrate both the breadth of our ability to provide exit solutions and our continuing penetration into larger deal activity.”