Enstar acquires Maiden Reinsurance North America for $308m

Bermuda-based Enstar Group is  acquiring Maiden Reinsurance North America from a subsidiary of Maiden Holdings.

Maiden Re North America is a diversified insurance company domiciled in Missouri that provides property and casualty treaty reinsurance, casualty facultative reinsurance and accident and health treaty reinsurance. As part of the transaction, an Enstar subsidiary will novate and assume certain reinsurance agreements from Maiden’s Bermuda reinsurer, including certain reinsurance agreements with Maiden Re North America.

The net consideration payable in the transactions is $307.5 million, subject to certain closing adjustments. Enstar will assume approximately $1.3 billion of net loss and loss adjustment expense reserves and unearned premium reserves upon closing.

Enstar, which will operate the business in run-off, expects to finance the purchase price through a combination of cash on hand and borrowings under its revolving credit facility. The transaction is expected to close in the fourth quarter of 2018 following regulatory approval.

Maiden CEO designate Lawrence Metz, said: “Today’s announcement of the sale of MRNA represents another step in our continuing strategic review. This transaction will broaden our ability to manage and allocate capital as we move forward, and will create value for our shareholders”.

Patrick Haveron, Maiden’s CFO and COO designate said: “Today’s announcement along with our previously announced renewal rights transaction will further enhance our capital position. We are moving immediately to improve profitability by implementing additional operational efficiencies and expense reductions through the end of 2018, and we expect to provide further updates as we move forward.”