Ark Syndicate Management Ltd parent Ark Insurance Holdings Ltd will become majority owned by White Mountains Insurance Group.
“White Mountains will contribute $605 million of equity capital to Ark, at a pre-money valuation of $300 million and will also purchase $41 million of shares from existing owners,” said the investor, which is a Bermuda-domiciled financial services holding company.
“White Mountains will commit to contribute up to an additional $200 million of equity capital to Ark in 2021. Total post-closing capitalisation will exceed $800 million (and will exceed $1 billion if the additional $200 million is contributed in full).”
It was noted that, on a basic shares outstanding basis at closing, the firm will own 72% of Ark, which manages the underwriting of Syndicates 4020 and 3902 at Lloyd’s of London; 77% if the additional $200 million (around £154.5 million) is contributed.
Meanwhile, all shares outstanding not owned by White Mountains will be owned by management rollover shareholders. These are primarily co-founders Ian Beaton and Nick Bonnar, who serve as Ark Syndicate Management chief executive and chief underwriting officer, respectively.
“We are delighted to have found the right capital partner in White Mountains, an institution with a long track record of successful insurance partnerships,” commented Beaton. “We look forward to a fruitful relationship.”
With the capital, the plan is to grow Ark’s business substantially by increasing aligned capacity at its Lloyd’s syndicates to 100%; improving overall stamp capacity; converting the company’s existing Bermuda reinsurance entity into a Class 4 reinsurer; and recruiting underwriters in both the London and Bermuda markets.
The transaction is expected to close in January next year.
Also pleased with the investment is White Mountains CEO Manning Rountree, who noted: “Ian, Nick, and the rest of the Ark team have built a high-quality insurance business that puts underwriting first. We are delighted to partner with them, and we are excited about the market opportunity in front of us.”
Lloyd’s Syndicates 4020 and 3902 underwrite a diversified portfolio of reinsurance and insurance business spanning property, accident & health, energy, marine, and political risks.
