Global insurance group Enstar is set to be acquired by existing investor Sixth Street in a $5.1 billion transaction, with Liberty Strategic Capital, J.C. Flowers & Co. LLC, and other institutional investors participating in the deal.
Upon closing of the transaction, Enstar shareholders will receive a total of $338.00 in cash per ordinary share of Enstar, which represents a total equity value of $5.1 billion.
The deal has been unanimously approved and recommended to its shareholders by Enstar’s Board of Directors, and is expected to close in mid-2025, subject to approval by Enstar’s shareholders, regulatory approvals, and other customary closing conditions.
An announcement on the deal confirms that the transaction is fully financed, with the full amount of equity being provided by Sixth Street, together with its co-investors. Enstar has agreed to return approximately $500 million from its balance sheet to its shareholders as part of the total $338.00 in cash per ordinary share received by shareholders of Enstar.
Once the deal completes, Enstar’s common stock will no longer be publicly listed, and the insurer will become a privately-held company, but will continue to operate under the Enstar name and will maintain its current operations and business strategy.
The total consideration represents a premium of approximately 8.5% to the 90-day volume weighted average price (VWAP) of the company shares as of July 26th, 2024, the last trading day prior to the announcement. It also represents a premium of 6.9% to the 60-day VWAP as of the same date.
Enstar’s Chief Executive Officer, Dominic Silvester, commented: “Over the past 30 years, Enstar has built a strong position in the legacy market founded on our exceptional scale and track record, pricing and claims expertise, and entrepreneurial culture.
“This transaction provides a full liquidity event for shareholders and is a testament to the strength of our team. We believe this is the best next step for our shareholders and we look forward to this exciting new chapter.”
Michael Muscolino, Co-Founder and Partner at Sixth Street, said: “Enstar has a proven track record of delivering innovative legacy P&C solutions and capitalising on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture.
“As an existing investor in Enstar, we have a deep respect for the business Enstar’s management team has built and look forward to continue supporting the Company’s current strategy.”
Enstar confirms that the definitive merger agreement includes a 35-day “go-shop” period expiring on September 2nd, 2024, which permits the firm’s Board and advisors to solicit alternative acquisition proposals from third parties.
