Ambac to acquire majority stake in Beat Capital Partners

Insurance holding company Ambac Financial Group has signed a definitive agreement to acquire a 60% controlling stake in Beat Capital Partners, a London-based insurance underwriting and managing general agency incubation platform, for approximately $282 million, up to $40 million of which will be paid in shares of Ambac common stock. The remainder will be paid in cash and is subject to closing adjustments. The transaction is expected to close in the third quarter of 2024, subject to regulatory approvals. The transaction will be financed from available cash and committed financing.

Pursuant to the agreement, Ambac will purchase 60% of Beat from existing shareholders, including Bain Capital and Beat’s management team. Consistent with Ambac’s philosophy of financial alignment of interests with its business partners, Beat’s management team and Bain Capital each will retain an equity stake of approximately 20% in Beat.

Since its inception in 2017, Beat has launched 13 Underwriting Franchises and MGAs. In addition, it has certain management rights for Syndicates 4242 and 1416 at Lloyd’s and an exclusive capacity relationship with a Bermuda reinsurer (Cadenza Re). Beat’s businesses produced $533 million in combined gross premiums and approximately $17 million in EBITDA in 2023.

Cavanagh, an industry veteran and former Global CEO of Willis Re (now Gallagher Re), will continue to manage the business as part of the senior Beat leadership team. Beat provides underwriters with a full range of services including access to capacity, infrastructure, and partnership with its experienced team, which guides new businesses through the start-up phase and provides ongoing oversight and support.

With the addition of Beat, Ambac’s specialty property and casualty insurance platform is projected to generate in excess of $1.4 billion in gross written premiums on a combined full-year 2024 pro forma basis.

Ambac’s specialty property and casualty platform includes Everspan Group, comprised of several insurance carriers rated A- (Excellent) by AM Best, and Cirrata Group, an insurance distribution business with several best-in-class MGAs and a wholesale broker.

“This is a monumental day for Ambac. The acquisition of Beat, which is one of the largest UK independent underwriting managers, aligns with our vision of being a premier destination for MGAs and materially accelerates our progress towards our three-year target of generating in excess of $100 million of annual EBITDA. This acquisition propels Ambac to the forefront of the specialty program insurance market. We are not simply acquiring a leading specialty underwriting platform; we are aligning with a team that has proven ability to build and launch profitable de novo MGAs, which is a core pillar of our growth strategy. Adding Beat to our platform gives us immediate scale and a strong pipeline to fuel future growth.” – Claude LeBlanc, President and Chief Executive Officer of Ambac.

“This is a transformational partnership for Beat. Ambac’s well-established MGA incubation and carrier capabilities and its outstanding leadership team is a perfect fit with Beat’s existing platform and team. This joint enterprise now represents one of the foremost global platforms for MGAs and Underwriting Franchises, with a significant footprint in the US, UK and Bermudan markets and scope to grow into other geographies. Our aligned capacity, affiliated carrier capabilities and global licensing offers leading specialty underwriters who have an absolute focus on underwriting profit the perfect platform to build their businesses.” – John Cavanagh, Partner and Chairman of Beat.

“The Beat team have built an incredible franchise over the past seven years by balancing exceptional growth with a ceaseless focus on underwriting performance. We are fortunate to be part of their journey. We believe partnering with Ambac perfectly complements Beat’s capabilities and creates an outstanding global specialty insurance destination for top-tier underwriters.” – Matt Cannan, Partner of Bain Capital.