R&Q in £482m deal with top shareholder; says acquisition in ‘best interest’ following review

Randall & Quilter Investment Holdings, the non-life global specialty insurance company focusing on program management and legacy insurance businesses, has agreed to be acquired by one of its major shareholders for approximately £482 million, following a detailed “review” by its new management.

Brickell PC Insurance Holdings, which is backed by Florida-based global investment firm 777 Partners, has offered 175 pence in cash for each R&Q share, valuing its existing issued share capital at approximately £482 million.

In addition, Brickell has promised to invest $100 million of new equity funding in R&Q to strengthen its balance sheet and improve the group’s financial profile following new management’s in-depth review of its legacy insurance portfolio.

R&Q has been operating in the insurance industry for over 30 years. The company is incorporated in Bermuda, with operations in the US, UK, Europe and Bermuda across eight offices.

Following the deal, Brickell PC2 Insurance Holdings will be incorporated in Bermuda in 2022 for purposes of merging with R&Q. R&Q will become an indirect wholly-owned subsidiary of Brickell.

The company’s management believes that both the acquisition and new equity funding are in the “best interest of shareholders” and has urged them to vote unanimously in favour of the deal at its upcoming general meeting.

“The Acquisition provides shareholders the opportunity to crystallise the value of their holdings,” said William Spiegel (pictured), executive chairman of R&Q. “[…] while also providing $100 million in new equity funding to de-lever our balance sheet and improve our financial profile.”

“Furthermore, the offer demonstrates the strength of both our business today and the opportunities ahead of us,” Spiegel added. “The value Brickell sees in R&Q is testament to the clear strategic vision we have outlined, the quality of our Legacy Insurance and Program Management businesses and the skills and expertise of our people.”

Spiegel noted that the deal would be an “excellent outcome for our trading partners and employees, with Brickell’s existing presence and significant ambitions in the fronting and legacy sectors highly complementary to our business.”

Steven Pasko, chairman of Brickell, said: “We have enjoyed a strong relationship with R&Q as a shareholder since 2019 and further supported the business with an infusion of capital in 2020. We are excited about the prospect of integrating R&Q into our robust insurance ecosystem and expanding our business into the legacy space, by combining R&Q’s deep experience in managing complex run-off claims with 777’s unique asset management capabilities.”

Brickell, and its affiliates currently have a 23.2% shareholding in R&Q but 9.9% voting rights in R&Q. In March 2019, Brickell made its initial investment in R&Q by acquiring a 9.0% shareholding. In April 2020, Brickell purchased an additional $80 million of exchangeable preferred stock of a R&Q affiliate. In January 2021, Brickell exchanged the preferred stock to equity in R&Q but remained at 9.9% voting interest in R&Q following the receipt of relevant regulatory  approvals.

Barclays Bank and Numis Securities are acting as financial advisors to R&Q on the acquisition.

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