Private equity firms buy stakes in Sirius in private placement

Bermuda-based Sirius International Insurance Group has entered into equity subscription agreements with affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, and Bain Capital Credit.

As part of the deal investors have committed to purchase $213 million of Series B preference shares and common shares in a private placement. The amount may be decreased to $111 million at Sirius Group's option. In addition, the investors will receive warrants that are exercisable for a period of five years after the issue date at a strike price equal to 125 percent of the merger price.

Earlier in June, Sirius Group, a multi-line re/insurance group, and Easterly executed a definitive agreement and plan to merge their operations with Easterly becoming a wholly-owned subsidiary of Sirius in a move that will turn Sirius into a publicly listed company.

The closing of the private placement is subject to the closing of the merger, as well as other customary conditions. Proceeds from the private placement will be used by Sirius Group to redeem all outstanding Series A preference shares, and the remainder for general corporate purposes.

Sirius has also amended the merger agreement with Easterly, modifying the date on which the exchange ratio, used to calculate the number of Sirius Group common shares to be issued in the merger, is determined. Easterly's common stock will be exchanged for Sirius Group's common shares at a value equal to 1.05x Sirius Group's diluted GAAP book value per share as of September 30, 2018, instead of as of June 30, 2018 as previously announced.

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