Enstar to acquire Torus; CEO is replaced

Enstar Group has agreed to acquire global specialty insurer Torus Insurance Holdings, the deal representing a move into 'live' underwriting for the run-off specialist while Torus has also replaced its CEO .

Upon completion, Enstar will own 60% of Torus and private equity firm Stone Point Capital, 40%. Dermot O'Donohoe, chief executive of Torus’s international operations, has also been named overall chief executive of Torus, replacing Clive Tobin who has retired.

Torus is the holding company of six wholly owned insurance vehicles, including one Lloyd's syndicate. The total consideration for the transaction is $692 million.

Enstar will issue shares with an aggregate value of approximately $346 million to partially fund the purchase price and also contribute approximately $69 million in cash. Affiliates of Stone Point Capital will fund the remaining approximately $277 million through an equity co-investment.

Following the closing of the transaction, Enstar will own 60% of Torus and Stone Point will own 40%.

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

Enstar also announced that affiliates of Stone Point have committed to provide up to $106 million of equity capital towards Enstar's previously announced acquisitions of Atrium Underwriting Group and Arden Reinsurance Company. Assuming both of those transactions are consummated, Enstar would own 60% of those companies and Stone Point would own 40%.

Dominic Silvester, Enstar's chief executive, said: "Following the recent announcement of our agreement to acquire Atrium, we are pleased to continue our expansion into 'live' underwriting through the acquisition of Torus.

“Torus provides us with an opportunity to acquire a large, international A- rated group of companies that both diversifies Enstar into the active market and enhances the opportunities available to our core legacy business. In addition, we are excited to be partnering with Stone Point. We have worked with them successfully in the past and we believe their expertise in the insurance industry will add tremendous value to these acquisitions."

Dermot O'Donohoe, who Torus has named its group chief executive, said: "We are very pleased with this transaction and the opportunity to join Enstar during this exciting time, as it expands into the live insurance market. We have a high regard for both Enstar and Stone Point and are confident in our collective abilities to achieve great results as a result of this deal."