Enstar Group Ltd. (ESGR:US), the firm that assumes risks from insurers seeking to exit businesses, agreed to buy Torus Insurance Holdings Ltd. for $692 million to expand into direct sales of coverage.
Enstar will pay $415 million and Stone Point Capital LLC, led by Chairman Stephen Friedman, will provide $277 million, the Bermuda-based buyer said in a statement today. Enstar will get a 60 percent stake and issue about $346 million in ordinary and preferred shares to fund the deal, according to the statement.
Insurers including Markel Corp. and Alleghany Corp. have been making acquisitions to gain scale and spread risk. Enstar Chief Executive Officer Dominic Silvester agreed last month to buy Atrium Underwriting Group Ltd. to add sales in accident-and-health, aviation and marine-property insurance.
The deal “diversifies Enstar into the active market and enhances the opportunities available to our core legacy business,” he said in the statement. Stone Point’s “expertise in the insurance industry will add tremendous value.”
Stone Point is one of the largest shareholders (ESGR:US) of Enstar and was one of the top investors in Alterra Capital Holdings Ltd., which agreed last year to sell itself to Markel. Friedman was on the board of New York-based Goldman Sachs Group Inc. from 2005 until this year.
Friedman, 75, joined Goldman Sachs in 1966, rising to co-chairman with Robert Rubin in 1990. He was a senior partner, and had roles including overseeing the mergers unit and serving as co-head of investment banking.
First Reserve Corp. and Corsair Capital LLC, the private-equity firms that are the largest shareholders of closely held Torus, will get Enstar stock and cash, according to the statement. Other holders of Bermuda-based Torus receive all cash, Enstar said.
Enstar slipped 6 cents to $137.94 at 9:34 a.m. in New York. The company advanced (ESGR:US) 23 percent this year.
Affiliates of Stone Point also committed to provide as much as $106 million of equity capital for the Atrium deal and an agreement to buy Arden Reinsurance Co., Enstar announced today. Greenwich, Connecticut-based Stone Point has raised and managed five private-equity funds with aggregate committed capital of more than $9 billion, according to the statement.
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