Apollo acquires Aspen for $2.6bn

Alternative investment manager Apollo is offering $2.6 billion to buy Bermuda-based Aspen Insurance Holdings and take the insurer private.

Under the terms of the agreement, which has been approved by Aspen’s board of directors, the Apollo Funds will acquire all of the outstanding shares of Aspen for $42.75 per share in cash, representing an equity value of approximately $2.6 billion.

“We are tremendously excited for the Apollo Funds to acquire Aspen,” said Alex Humphreys, partner at Apollo. “We believe that Aspen benefits from strong underwriting talent, specialized expertise and longstanding client relationships which makes them well positioned in the market. We look forward to working with Aspen to build on the existing high-quality specialty insurance and reinsurance business and we aim to leverage Apollo’s resources and deep expertise in financial services to support the company as it embarks on its next chapter.”

Glyn Jones, chairman of Aspen’s board of directors, said: “This transaction, which is the outcome of a thorough strategic review by Aspen’s board of directors, provides shareholders with immediate value and will allow Aspen to work with an investor that has substantial expertise and a successful track record in the re/insurance industry.”

Aspen reported an underwriting loss of $558.1 million for 2017 after an underwriting profit of $51.9 million in the previous year. The combined ratio deteriorated to 125.7 percent from 98.5 percent over the period. For the year ended Dec. 31, 2017, Aspen reported $12.9 billion in total assets, $6.7 billion in gross reserves, $2.9 billion in total shareholders’ equity and $3.4 billion in gross written premiums.

Chris O’Kane, Aspen’s Group CEO, said: “This transaction is a testament to the strength of Aspen’s franchise, the quality of our business and the talent and expertise of our people. Under the ownership of the Apollo Funds, Aspen will have additional scale and access to Apollo’s investment and strategic guidance, which will help us to accelerate our strategy and take Aspen to the next level. We are excited about the future as we embark on a new chapter in our history with a partner that understands our strengths, culture and customer-centric philosophy.”

The transaction is expected to close in the first half of 2019. Upon completion of the deal, Aspen will be a privately held portfolio company of the Apollo Funds and Aspen’s ordinary shares will no longer be listed on the New York Stock Exchange.

Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Australia, Bermuda, Canada, Ireland, Singapore, Switzerland, the United Arab Emirates, the UK and the US.

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