Enstar to be Acquired by Sixth Street for $5.1 Billion
Enstar Group (Nasdaq: ESGR) has announced a definitive merger agreement with Sixth Street, valuing the company at $5.1 billion. Enstar shareholders will receive $338.00 per share in cash, representing a premium of 8.5% to the 90-day VWAP. The transaction, expected to close in mid-2025, includes a 35-day "go-shop" period and will result in Enstar becoming a privately-held company. Sixth Street, along with Liberty Strategic Capital and J.C. Flowers & Co. , will maintain Enstar's current operations and business strategy. The deal is fully financed, with Enstar agreeing to return approximately $500 million from its balance sheet to shareholders as part of the total consideration.
Enstar Group (Nasdaq: ESGR) ha annunciato un accordo di fusione definitivo con Sixth Street, valorizzando l'azienda a 5,1 miliardi di dollari. Gli azionisti di Enstar riceveranno 338,00 USD per azione in contante, rappresentando un premio dell'8,5% rispetto al VWAP di 90 giorni. La transazione, prevista per chiudersi a metà del 2025, include un periodo di "go-shop" di 35 giorni e comporterà il passaggio di Enstar a una società privata. Sixth Street, insieme a Liberty Strategic Capital e J.C. Flowers & Co., manterrà le attuali operazioni e la strategia commerciale di Enstar. L'accordo è completamente finanziato, con Enstar che accetta di restituire circa 500 milioni di dollari dal proprio bilancio agli azionisti come parte del corrispettivo totale.
Enstar Group (Nasdaq: ESGR) ha anunciado un acuerdo de fusión definitivo con Sixth Street, valorando la empresa en 5.1 mil millones de dólares. Los accionistas de Enstar recibirán 338.00 USD por acción en efectivo, lo que representa una prima del 8.5% sobre el VWAP de 90 días. La transacción, que se espera cierre a mediados de 2025, incluye un período de "go-shop" de 35 días y resultará en que Enstar se convierta en una empresa privada. Sixth Street, junto con Liberty Strategic Capital y J.C. Flowers & Co., mantendrá las operaciones y la estrategia comercial actuales de Enstar. El acuerdo está totalmente financiado, y Enstar acepta devolver aproximadamente 500 millones de dólares de su balance a los accionistas como parte de la consideración total.
Enstar Group (Nasdaq: ESGR)는 Sixth Street와의 확정적 합병 계약을 발표했으며, 이 회사의 가치는 51억 달러에 달합니다. Enstar 주주들은 주당 338.00 달러를 현금으로 받게 되며, 이는 90일 VWAP에 대해 8.5%의 프리미엄을 의미합니다. 이 거래는 2025년 중반에 완료될 것으로 예상되며, 35일간의 "go-shop" 기간이 포함되어 있으며 Enstar는 비상장 기업이 됩니다. Sixth Street는 Liberty Strategic Capital 및 J.C. Flowers & Co.와 함께 Enstar의 현재 운영 및 비즈니스 전략을 유지할 것입니다. 이 거래는 완전히 자금이 조달되어 있으며, Enstar는 총 보상금의 일환으로 주주에게 약 5억 달러를 반환하기로 동의했습니다.
Enstar Group (Nasdaq: ESGR) a annoncé un accord de fusion définitif avec Sixth Street, valorisant l'entreprise à 5,1 milliards de dollars. Les actionnaires d'Enstar recevront 338,00 USD par action en espèces, représentant une prime de 8,5 % par rapport au VWAP sur 90 jours. La transaction, qui devrait être conclue à mi-2025, inclut une période de "go-shop" de 35 jours et entraînera le passage d'Enstar en société privée. Sixth Street, en collaboration avec Liberty Strategic Capital et J.C. Flowers & Co., maintiendra les opérations et la stratégie commerciale actuelles d'Enstar. L'accord est entièrement financé, Enstar ayant accepté de restituer environ 500 millions de dollars de son bilan aux actionnaires dans le cadre de la contrepartie totale.
Enstar Group (Nasdaq: ESGR) hat eine definitive Fusionsvereinbarung mit Sixth Street angekündigt, die das Unternehmen mit 5,1 Milliarden Dollar bewertet. Enstar-Aktionäre erhalten 338,00 USD pro Aktie in bar, was einer Prämie von 8,5% gegenüber dem 90-Tage-VWAP entspricht. Die Transaktion, die voraussichtlich mitte 2025 abgeschlossen wird, umfasst eine 35-tägige "go-shop"-Phase und wird dazu führen, dass Enstar zu einem privat gehaltenen Unternehmen wird. Sixth Street wird zusammen mit Liberty Strategic Capital und J.C. Flowers & Co. die aktuellen Betrieb und Geschäftsstrategie von Enstar beibehalten. Der Deal ist vollständig finanziert, und Enstar hat zugestimmt, etwa 500 Millionen Dollar aus seiner Bilanz an die Aktionäre als Teil der Gesamtvergütung zurückzugeben.
- Shareholders receive a premium of 8.5% to the 90-day VWAP
- Full liquidity event for shareholders with $338.00 per share in cash
- Transaction values Enstar at $5.1 billion
- Enstar to maintain current operations and business strategy post-acquisition
- Fully financed deal with $500 million return from Enstar's balance sheet to shareholders
- Enstar will no longer be publicly listed after the transaction
- Potential regulatory approval risks may delay or prevent the deal's closure
Insights
This acquisition of Enstar by Sixth Street for
Key points to consider:
- The transaction provides full liquidity for Enstar shareholders, which is particularly attractive in the current economic climate.
- The deal structure, including the
$500 million return from Enstar's balance sheet, suggests a strong financial position of the company. - The 35-day "go-shop" period allows for potential superior offers, though the likelihood of this is uncertain given the current market dynamics.
- Post-acquisition, Enstar will become private, which could allow for more flexibility in long-term strategic decisions without the pressures of quarterly reporting.
From an investor's perspective, this deal offers a guaranteed return in a volatile market. However, it also means losing exposure to potential future growth in the legacy P&C solutions market. The continuation of Enstar's current strategy under Sixth Street's ownership suggests confidence in the company's business model and market position.
This acquisition highlights the growing interest in the legacy insurance market. Enstar, with its 30-year track record, has built a strong position in this niche but important sector. The decision by Sixth Street, an existing investor, to fully acquire Enstar underscores the potential they see in the legacy P&C solutions market.
Key considerations for the industry:
- The deal may trigger further consolidation in the legacy insurance sector as competitors seek to achieve similar scale and expertise.
- Enstar's transition to a private company could potentially allow for more aggressive growth strategies in the legacy market.
- The involvement of Liberty Strategic Capital and J.C. Flowers & Co. as co-investors brings additional insurance expertise to the table, which could further strengthen Enstar's market position.
The continuation of Enstar's current operations and business strategy post-acquisition is crucial. It suggests that Sixth Street recognizes the value in Enstar's existing approach to pricing, claims expertise and risk management. This continuity could be reassuring for Enstar's clients and partners in the insurance industry.
Overall, this transaction could potentially reshape the competitive landscape in the legacy insurance market, with implications for pricing, capacity and innovation in legacy P&C solutions.
The acquisition of Enstar by Sixth Street is a strategic move that could have ripple effects across the insurance and reinsurance markets. Let's break down the key market implications:
- Market Consolidation: This
$5.1 billion deal could trigger a wave of consolidation in the legacy insurance sector, as competitors may feel pressured to scale up to remain competitive. - Valuation Benchmark: The
8.5% premium to the 90-day VWAP sets a new benchmark for valuations in the sector, which could influence future M&A activity. - Private Equity Interest: The involvement of Sixth Street, Liberty Strategic Capital and J.C. Flowers & Co. signals continued private equity interest in the insurance sector, particularly in specialized niches like legacy P&C.
- Market Dynamics: Enstar's transition to a private company could potentially alter competitive dynamics in the legacy market, possibly leading to more aggressive pricing or innovative solutions.
From a broader market perspective, this deal underscores the value placed on companies with strong risk management cultures and conservative balance sheets in the current economic environment. It also highlights the attractiveness of businesses that can provide steady returns in uncertain market conditions.
For investors, this transaction may prompt a reassessment of valuations in the insurance sector, particularly for companies with strong positions in specialized markets. It also serves as a reminder of the potential for M&A activity to drive shareholder value in mature industries.
Enstar shareholders to receive
Strong alignment between Enstar and Sixth Street to ensure continuity of Enstar strategy
HAMILTON, Bermuda, July 29, 2024 (GLOBE NEWSWIRE) -- Enstar Group Limited (“Enstar”) (Nasdaq: ESGR) today announced that it 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
The consideration represents a premium of approximately
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,” said Enstar’s Chief Executive Officer Dominic Silvester. “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 has a proven track record of delivering innovative legacy P&C solutions and capitalising on attractive opportunities in the reinsurance market, while maintaining a conservative balance sheet and strong risk management culture,” said Michael Muscolino, Co-Founder and Partner at Sixth Street. “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.”
Transaction Details
The transaction, which has been unanimously approved and recommended to its shareholders by Enstar’s Board of Directors, is expected to close in mid-2025, subject to approval by Enstar’s shareholders, regulatory approvals, and other customary closing conditions.
The definitive agreement provides that Enstar will undertake a series of transactions in which Enstar shareholders will receive
The agreement includes a 35-day "go-shop" period expiring on September 2, 2024, which permits Enstar's Board of Directors and advisors to solicit alternative acquisition proposals from third parties. There can be no assurance that this "go-shop" will result in a superior proposal, and Enstar does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or is otherwise required. Enstar will have the right to terminate the merger agreement to enter into a superior proposal both during and after the “go-shop” period, subject to the terms and conditions of the merger agreement.
Upon completion of the transaction, Enstar's common stock will no longer be publicly listed, and Enstar will become a privately-held company. The Company will continue to operate under the Enstar name.
Second Quarter Financial Results
In a separate press release, Enstar today announced its financial results for the second quarter, which is accessible by visiting the Investor Relations section of the Enstar corporate website at https://www.enstargroup.com. In light of the announced transaction, Enstar will not be providing recorded commentary to accompany its June 30, 2024 financial results.
Advisors
Goldman Sachs & Co. LLC is acting as financial advisor to Enstar and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Hogan Lovells US LLP are acting as legal advisors. Ardea Partners LP, Barclays PLC and J.P. Morgan Securities LLC are acting as financial advisors to Sixth Street and Simpson Thacher & Bartlett LLP, Debevoise & Plimpton LLP and Cleary Gottlieb Steen & Hamilton LLP are acting as legal advisors.
Forward Looking Statements
This communication contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that include words such as “estimate,” “project,” “plan,” “intend,” “expect,” “anticipate,” “believe,” “would,” “should,” “could,” “seek,” “may,” “will” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, including those related to the satisfaction of any post-closing regulatory requirements.
Risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, in addition to those identified above, include: (i) the completion of the proposed transaction on the anticipated terms and timing, (ii) the satisfaction of other conditions to the completion of the proposed transaction, including obtaining required shareholder and regulatory approvals; (iii) the risk that Enstar’s stock price may fluctuate during the pendency of the proposed transaction and may decline if the proposed transaction is not completed; (iv) potential litigation relating to the proposed transaction that could be instituted against Enstar or its directors, managers or officers, including the effects of any outcomes related thereto; (v) the risk that disruptions from the proposed transaction (including the ability of certain customers to terminate or amend contracts upon a change of control) will harm Enstar’s business, including current plans and operations, including during the pendency of the proposed transaction; (vi) the ability of Enstar to retain and hire key personnel; (vii) the diversion of management’s time and attention from ordinary course business operations to completion of the proposed transaction and integration matters; (viii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (ix) legislative, regulatory and economic developments; (x) potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transaction that could affect Enstar’s financial performance; (xi) certain restrictions during the pendency of the proposed transaction that may impact Enstar’s ability to pursue certain business opportunities or strategic transactions; (xii) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, outbreaks of war or hostilities or global pandemics, as well as management’s response to any of the aforementioned factors; (xiii) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xiv) unexpected costs, liabilities or delays associated with the transaction; (xv) the response of competitors to the transaction; (xvi) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction, including in circumstances requiring Enstar to pay a termination fee; (xvii) those risks and uncertainties set forth under the headings “Forward Looking Statements” and “Risk Factors” in Enstar’s most recent Annual Report on Form 10-K, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by Enstar with the SEC from time to time, which are available via the SEC’s website at www.sec.gov; and (xviii) those risks that will be described in the proxy statement that will be filed with the SEC and available from the sources indicated below.
These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the proxy statement that will be filed with the SEC in connection with the proposed transaction. There can be no assurance that the proposed transaction will be completed, or if it is completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. The forward-looking statements relate only to events as of the date on which the statements are made. Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, or to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law. If one or more of these or other risks or uncertainties materialise, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this communication that could cause actual results to differ. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect Enstar.
Important Information for Investors and Shareholders
This communication is being made in connection with the proposed transaction involving Enstar and Sixth Street. In connection with the proposed transaction, Enstar plans to file with the Securities and Exchange Commission (the “SEC”) relevant materials, including a proxy statement on Schedule 14A. The definitive proxy statement (if and when available) will be mailed to shareholders of Enstar. This communication is not a substitute for the proxy statement or any other document that Enstar may file with the SEC or send to its shareholders in connection with the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Shareholders will be able to obtain, free of charge, copies of such documents filed by Enstar when filed with the SEC in connection with the proposed transaction at the SEC’s website (http://www.sec.gov). In addition, Enstar’s shareholders will be able to obtain, free of charge, copies of such documents filed by Enstar at Enstar’s website (https://investor.enstargroup.com). Alternatively, these documents, when available, can be obtained free of charge from Enstar’s upon written request to Investor Relations at investor.relations@enstargroup.com.
About Enstar
Enstar is a NASDAQ-listed leading global insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in completing legacy acquisitions, Enstar has acquired more than 117 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com.
About Sixth Street
Sixth Street is a leading global investment firm with over
Contact:
For Enstar:
For Investors: Matthew Kirk (investor.relations@enstargroup.com)
For Media: Jenna Kerr (communications@enstargroup.com)
For Sixth Street:
Patrick Clifford
Pclifford@sixthstreet.com
+1 (646) 906-4339
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