Sirius International Group, a global multi-line insurance and reinsurance group, has entered a merger agreement with Easterly Acquisition Corp. for a proposed business combination that would result in Sirius becoming a publicly listed company.
Under the terms of the agreement, Easterly would merge with a subsidiary of Sirius Group to become a wholly owned subsidiary, after which Easterly’s common stock would be exchanged for Sirius Group’s common shares at a price of 1.05x the diluted GAAP book value per share.
Following the merger, Sirius Group has confirmed that its common stock will be traded on the NASDAQ.
The proposed all-stock transaction is expected to yield a combined entity with a pro forma market capitalisation of around $2.2 billion at closing, of which current Easterly stockholders will own approximately 7%.
Additionally, Sirius says it intends to execute a private placement of common shares and will request Easterly to commence a tender offer to purchase Easterly’s public warrants.
Easterly Acquisition Corp. is a Special Purpose Acquisition Company sponsored by Easterly Acquisition Sponsor, LLC, an affiliate of private asset management holding company Easterly LLC.
Allan Waters, President, Chief Executive Officer (CEO) and Chairman of Sirius Group, said: “We are pleased to become a public company though our partnership with Easterly. Access to the public equity markets will facilitate and accelerate our future growth via M&A transactions and organically.”
Avshalom Kalichstein, CEO of Easterly, also commented: “We are excited to bring a company of the scale and stature of Sirius into the public markets. We believe this transaction will offer tremendous value to our shareholders.”
Easterly has scheduled a special meeting of its stockholders to approve an extension of time to complete the proposed business combination through November 30, 2018.
Sirius Group has agreed to lend Easterly $0.03 per month through the extension period for each public share that is not redeemed at Easterly’s upcoming special meeting.
The loan proceeds will be deposited into Easterly’s trust account upon receipt, and the loan will be forgiven if the merger does not close by the specified date.
The merger has already been approved by the boards of directors of both Sirius Group and Easterly, and is expected to close during the second half of 2018, subject to approval by Easterly’s stockholders.
Headquartered in Bermuda, Sirius Group provides multi-line re/insurance in over 140 countries through operating companies in Stockholm, New York, and London, and wrote gross premiums of $1.4 billion in 2017.
