Enstar Group announced that one of its wholly-owned subsidiaries has completed a loss portfolio transfer (LPT) transaction with a subsidiary of SiriusPoint Ltd. The transaction, which reinsures a $400 million portfolio of workers' compensation business, covers underwriting years 2018 to 2023.
Under the agreement, SiriusPoint will cede net reserves of approximately $400 million. Enstar’s subsidiary will provide $200 million in coverage beyond the ceded reserves and claims management responsibilities will transfer to Enstar.
The completion of the deal followed regulatory approvals and fulfillment of other closing conditions. The LPT was initially announced in May.
Enstar's CEO, Dominic Silvester (pictured above), said that the partnership with SiriusPoint aligns with Enstar’s capabilities in US workers' compensation and reflects its ability to structure complex risk solutions.
“For SiriusPoint, this bespoke transaction will help to support its long-term strategic, economic and operational goals,” he said.
In a separate development, Enstar also disclosed a definitive merger agreement with investment firm Sixth Street, under which Sixth Street will acquire Enstar. Other institutional investors, including Liberty Strategic Capital and JC Flowers & Co LLC, are also participating in the transaction, which was first announced in July.
Enstar shareholders are set to receive $338.00 in cash per ordinary share upon the transaction’s close, valuing the company at $5.1 billion. The consideration reflects a premium of 8.5% to the 90-day volume weighted average price (VWAP) of the company’s shares as of July 26, 2024, and a 6.9% premium to the 60-day VWAP on the same date.
Following the transaction, Enstar has stated that it will maintain its current operations and business strategy. Last month, the company confirmed that its “go shop" period has concluded, with Enstar receiving no competing acquisition proposals to the $5.1 billion offer from Sixth Street.
“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,” Silvester 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.”
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