Global insurance group Enstar has announced a definitive merger agreement under which Sixth Street will acquire Enstar, with Liberty Strategic Capital, JC Flowers & Co LLC, and other institutional investors also participating in the transaction.
Enstar shareholders are expected to receive $338.00 in cash per ordinary share upon closing, representing a total equity value of $5.1 billion.
The consideration offers a premium of approximately 8.5% to the 90-day volume weighted average price (VWAP) of the company shares as of July 26, 2024, and 6.9% to the 60-day VWAP as of the same date.
Following the close of the transaction, Enstar said that it will maintain its current operations and business strategy.
“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,” Enstar’s chief executive officer Dominic Silvester (pictured above) said. “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.”
“Enstar has a proven track record of delivering innovative legacy P&C solutions and capitalizing on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture,” Sixth Street co-founder and partner Michael Muscolino said. “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.”
The transaction, unanimously approved and recommended to shareholders by Enstar’s board of directors, is expected to close in mid-2025, subject to shareholder and regulatory approvals, and other customary closing conditions.
Enstar explained that the transaction is fully financed, with Sixth Street and its co-investors providing the equity, and Enstar returning approximately $500 million from its balance sheet to shareholders as part of the total cash consideration.
The agreement also includes a 35-day “go-shop” period expiring on September 2, 2024, allowing Enstar’s board of directors and advisors to solicit alternative acquisition proposals from third parties.
Upon completion of the transaction, Enstar’s common stock will also no longer be publicly listed, and the company will become privately held, continuing to operate under the Enstar name.
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