Global insurance group Enstar has announced a definitive merger agreement under which Sixth Street will acquire Enstar, with Liberty Strategic Capital, JC Flowers & Co LLC and other institutional investors also participating in the deal.

Enstar shareholders are expected to receive $338.00 in cash per common share at closing, 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 (VWAP) of the Company’s shares as of July 26, 2024, and 6.9% to the 60-day volume-weighted average price as of the same date.

Following the closing of the transaction, Enstar said it will maintain its current operations and business strategy.

“Over the past 30 years, Enstar has built a strong position in the traditional market based on our exceptional scale, proven track record, pricing and claims expertise and entrepreneurial culture,” said Enstar CEO Dominic Silvestre (pictured above). “This transaction provides full liquidity to shareholders and is a testament to the strength of our team. We believe this is the best next step for our shareholders and look forward to this exciting new chapter.”

“Enstar has a proven track record of delivering innovative property and casualty insurance solutions and capitalizing on attractive reinsurance opportunities, while maintaining a conservative balance sheet and strong risk management culture,” said Michael Muscolino, co-founder of Sixth Street. “As existing investors in Enstar, we have great respect for the business that Enstar’s management team has built and look forward to continuing to support the company’s current strategy.”

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The transaction, which has been unanimously approved and recommended to shareholders by Enstar’s board of directors, is expected to close in mid-2025, subject to shareholder and regulatory approvals, and other customary closing conditions.

Enstar said the deal is fully funded, with Sixth Street and its co-investors providing equity and Enstar returning approximately $500 million from its balance sheet to shareholders as part of the total cash consideration.

The agreement also includes a 35-day “shopping” period ending September 2, 2024, allowing Enstar’s board of directors and its advisors to solicit alternative acquisition proposals from third parties.

Upon completion of the transaction, Enstar’s common stock will also be delisted, the company will become privately held, and it will continue to operate under the Enstar name.

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