Enstar to be acquired by Sixth Street for $5.1 billion

Enstar Group has entered into a definitive merger agreement under which Sixth Street will acquire Enstar, with Liberty Strategic Capital, J.C. Flowers & Co. LLC, and other institutional investors participating in the transaction. Enstar shareholders will receive a total of $338 in cash per ordinary share of Enstar payable upon closing of the transaction, representing a total equity value of $5.1 billion.

The consideration represents a premium of approximately 8.5% to the 90-day volume weighted average price of the company shares as of July 26, 2024, the last trading day prior to the announcement of the transaction, and 6.9% to the 60-day VWAP as of the same date. The agreement includes a 35-day “go-shop” period.

The core of Enstar’s business is the acquisition and management of legacy insurance risk, and the primary focus is P&C companies and portfolios in run-off. The company has acquired more than 117 companies and portfolios since its formation in 2001.

In 2023, the company reported $1.1 billion in net income, compared to a net loss of $906 million in 2022.

Following the close of the transaction, Enstar will maintain its current operations and business strategy.

“Over the past 30 years, Enstar has built a strong position in the legacy market founded on our exceptional scale and track record, pricing and claims expertise, and entrepreneurial culture. This transaction provides a full liquidity event for shareholders and is a testament to the strength of our team. We believe this is the best next step for our shareholders and we look forward to this exciting new chapter.” – Enstar’s Chief Executive Officer Dominic Silvester.

“Enstar has a proven track record of delivering innovative legacy P&C solutions and capitalizing on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture. As an existing investor in Enstar, we have a deep respect for the business Enstar’s management team has built and look forward to continue supporting the Company’s current strategy.” – Michael Muscolino, Co-Founder and Partner at Sixth Street.