Enstar Group Limited (NASDAQ: ESGR) (“Enstar”) today announced an
exchange agreement with Trident V, L.P. and its affiliated funds
(the “Trident V Funds”) managed by Stone Point Capital LLC (“Stone
Point”). Subject to regulatory approvals, the transaction will
result in Enstar owning a greater share in StarStone U.S. Holdings,
Inc. (“StarStone U.S.”) and the Trident V Funds owning a greater
share in the holding company for Atrium Underwriting Group Limited
(“Atrium”).
The transaction is conditioned upon the closing
of the previously announced recapitalization of StarStone U.S.,
pursuant to which a new management team and Board of Directors will
be appointed and new investors will be brought in to increase its
total equity capitalization to over $850 million, with an Enstar
subsidiary reinsuring legacy reserves.
In the exchange, Enstar will acquire all of the
Trident V Funds’ interest in the recapitalized StarStone U.S.,
resulting in Enstar having approximately 26% of the ownership of
StarStone U.S. following the completion of the recapitalization and
exchange transactions.
The Trident V Funds will receive a portion of
Enstar’s indirect interest in Northshore Holdings Ltd., the holding
company for Atrium, increasing their indirect ownership interest in
Atrium from approximately 36% to approximately 80%, with Enstar
decreasing from approximately 54% to approximately 11% and
retaining one Northshore Holdings board seat. Members of Atrium’s
management team and funds managed by Dowling Capital (“Dowling”)
will continue to own minority positions in Northshore Holdings.
Enstar, the Trident V Funds and Dowling will
retain their respective ownership interests in StarStone’s non-US
operations (“StarStone International”), partnering in the run-off
of this business.
The Trident V Funds continue to own
approximately 9% of Enstar Group Limited’s ordinary voting
shares.
Dominic Silvester, Enstar’s Chief Executive
Officer, said: “This transaction deepens our successful
relationship with Stone Point, which has been a valued partner of
Enstar for two decades. Enstar is ideally placed to capitalize on
the increasing flow of large, attractive legacy opportunities, and
will remain invested in high-quality live underwriting businesses
with proven leadership, such as Atrium and StarStone U.S., through
meaningful minority stakes and alongside trusted equity
partners.”
Chuck Davis, Stone Point’s Chief Executive
Officer, said: “We are delighted to increase our investment in
Atrium. The company is led by an outstanding management team that
has a long-term track record of producing underwriting profits. We
also value our long-standing relationship with Dominic Silvester
and his colleagues at Enstar, and we look forward to continuing our
existing partnerships and identifying new opportunities for Enstar
and Stone Point.”
Richard Harries, Atrium’s Chief Executive
Officer, added: “Atrium has thrived under the joint ownership of
Enstar and Stone Point. This change, which will have no operational
impact on Atrium, is a further vote of confidence in the Atrium
team. I am pleased that Enstar will retain an ownership interest in
Atrium, and we welcome the increased participation of Stone Point,
whose management team we know well, as we pursue our strategic
goals in an increasingly improving underwriting environment.”
About Enstar
Enstar is a NASDAQ-listed leading global
insurance group that offers innovative capital release solutions
through its network of group companies in Bermuda, the United
States, the United Kingdom, Continental Europe, Australia, and
other international locations. A market leader in completing
legacy acquisitions, Enstar has acquired over 100 companies and
portfolios since its formation in 2001. For further information
about Enstar, see www.enstargroup.com.
About Stone Point
Stone Point Capital LLC is a financial
services-focused private equity firm based in Greenwich, CT. The
firm has raised and managed eight private equity funds – the
Trident Funds – with aggregate committed capital of more than $25
billion. Stone Point targets investments in companies in the global
financial services industry and related sectors. For further
information about Stone Point, please visit www.stonepoint.com.
About StarStone U.S.
StarStone U.S. offers a diversified range of
property and casualty insurance products for small to mid-sized
businesses. From eight underwriting offices spanning the U.S.,
StarStone U.S. focuses on niche markets, local distribution, and
superior underwriting knowledge, offering traditional as well as
innovative insurance solutions to meet the needs of its customers
and brokers. StarStone U.S. is an insurance holding company
operating through StarStone Specialty Insurance Company, a U.S.
excess and surplus lines insurer, and StarStone National Insurance
Company, a U.S. admitted markets insurer. StarStone is rated A-
(Excellent) by A.M. Best. For further information about
StarStone U.S., please visit www.starstone.com/u-s-overview/.
About Atrium
Atrium is a long-established, leading specialist
insurance and reinsurance business that has operated within the
Lloyd’s market since the 1930s. Underwriting through Syndicate 609,
Atrium manages a balanced portfolio, offering a wide range of
specialist marine, energy, aerospace, non-marine and liability
classes from its offices in London and the Unites States.For
further information about Atrium, please visit
www.atrium-uw.com.
Cautionary Statement
This press release contains certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
statements regarding the intent, belief or current expectations of
Enstar, Stone Point, Atrium and their respective management teams.
Investors are cautioned that any such forward-looking statements
speak only as of the date they are made, are not guarantees of
future performance and involve risks and uncertainties, and that
actual results may differ materially from those projected in the
forward-looking statements as a result of various factors. In
particular, Enstar and Stone Point may not be able to
complete the proposed transaction on the terms summarized above or
other acceptable terms, or at all, due to a number of factors,
including but not limited to the failure to obtain governmental and
regulatory approvals, failure to consummate the StarStone U.S.
recapitalization, or to satisfy other closing conditions. Important
risk factors regarding Enstar can be found under the heading "Risk
Factors" in our Form 10-K for the year ended December 31, 2019 and
in our Form 10-Q for the six months ended June 30, 2020 and are
incorporated herein by reference. Furthermore, Enstar undertakes no
obligation to update any written or oral forward-looking statements
or publicly announce any updates or revisions to any of the
forward-looking statements contained herein, to reflect any change
in its expectations with regard thereto or any change in events,
conditions, circumstances or assumptions underlying such
statements, except as required by law.
Contact: Enstar
CommunicationsTelephone: +1 (441) 292-3645
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