2 April 2014 Insurance

Torus deal moves Enstar towards ‘live’ underwriting

Run-off specialist Enstar Group and private equity firm Stone Point Capital have completed the previously announced acquisition of Torus Insurance Holdings. The deal represents the latest move into ‘live’ underwriting for Enstar.

Torus is an A- rated global specialty insurer with six wholly owned insurance vehicles, including Lloyd's Syndicate 1301. Last year, Enstar acquired Atrium Underwriting, which also has a Lloyd’s syndicate. That deal represented its first move away from solely run-off deals.

The purchasing entity in the Torus deal is indirectly owned 60 percent by an Enstar subsidiary and 40 percent by Trident V and affiliated co-investment funds, which are managed by Stone Point.

The Torus acquisition is the third and largest acquisition by Enstar and the Trident V funds in the active underwriting business.

Enstar contributed approximately $45.2 million in cash, 1,898,326 of its ordinary voting shares and 714,015 newly created non-voting preferred shares towards the purchase price and related transaction expenses, with the Trident V funds contributing approximately $260.8 million in cash through an equity co-investment.

Dominic Silvester, Enstar's chief executive officer, said: "I am very pleased to welcome the Torus team to Enstar as we announce the closing of this transaction. We are working closely with Torus and Stone Point to ensure a seamless transition for Torus' client and broker partners worldwide. With our active underwriting operations complementing our core legacy business, we also look forward to many new opportunities in Enstar's future."

Charles Davis, Stone Point's chief executive officer, said: "Stone Point has had a long and successful partnership with Enstar and its senior management team. Following on the recent acquisitions by Enstar and the Trident V funds of Atrium Underwriting Group and Arden Reinsurance Company, we again are excited to partner with Enstar in an active underwriting business."

Private equity firms First Reserve and Corsair Capital, which were Torus' largest shareholders, received both Enstar shares and cash consideration in the transaction, with the remaining Torus shareholders receiving all cash.

As a result of the closing, affiliates of First Reserve now own an approximately 11.5 percent economic interest in Enstar and hold 9.5 percent of Enstar's outstanding voting shares.

In connection with the closing and pursuant to First Reserve's contractual rights, Kenneth Moore, managing director of First Reserve, became a member of Enstar's board of directors, effective immediately.

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