R&Q Insurance Holdings and Obra Capital have announced that they have acquired a wholly owned subsidiary of safety equipment manufacturer MSA Safety Incorporated. The acquisition was accomplished through a newly formed joint venture between R&Q and Obra.
The acquired subsidiary holds product liability claims related to coal dust, asbestos, silica and other exposures, the companies said. MSA Safety contributed approximately $341 million to the subsidiary, in addition to related insurance assets, while the joint venture contributed $35 million.
As a result of the deal, R&Q will provide claims and management services, while Obra – which recently rebranded from Vida Capital – will provide investment management services to the company. The transaction allowed MSA Safety to remove all legacy cumulative trauma product liability reserves, related insurance assets, and associated deferred tax assets of the subsidiary from its balance sheets.
“We are pleased to form a joint venture with Obra to acquire and professionally manage these legacy liabilities, providing MSA Safety with a complete finality solution,” said William Spiegel, executive chairman of R&Q. “This is an exciting transaction for R&Q, showcasing the capabilities, reputation and innovation of our legacy insurance business.
“This will see our reserves and non-insurance liabilities under management increase to over $1 billion, comprising two pools: traditional insurance reserves via Gibson Re, and non-insurance legacy liabilities, furthering our goal of becoming a manager of legacy liabilities.”
“While we have been providing legacy insurance solutions to insurers, reinsurers and corporate captives for decades, this transaction opens up a new growth avenue in providing similar services for non-insurance corporate liabilities,” said Andrew Pinkes, CEO of legacy insurance at R&Q. “This transaction is a strong demonstration of R&Q’s expertise in underwriting and managing long-tailed liabilities, as well as our innovative approach to structuring and delivering comprehensive finality solutions.”
“With our team’s decades of experience investing in, managing and servicing long-dated liabilities, we are excited to partner with R&G on this liability solution,” said Blair Wallace, CEO of Obra Capital. “The transaction highlights both our ability to deploy capital into this type of risk as well as our capability of focusing on targeted investment returns in a portfolio framework that considers both asset risk and the liability requirements for a broad variety of liability types.”
“This transaction highlights Obra’s diverse investment capabilities, ranging from deploying opportunistic capital into specialty risk situations to leveraging our more traditional investment capabilities across a variety of fixed-income capital markets to enhance investor returns,” said Peter Polanskyj, head of structured credit at Obra.
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