Enstar Group has entered into a definitive merger agreement under which Sixth Street will acquire Enstar, with Liberty Strategic Capital, J.C. Flowers & Co., 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 bn.
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 consideration represents a premium of approximately 8.5% to the 90-day volume weighted average price (“VWAP”) 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.
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
Dominic Silvester, Enstar’s Chief Executive Officer
The transaction is fully financed, with the full amount of equity being provided by Sixth Street, together with its co-investors, and Enstar agreeing to return approximately $500 mn from its balance sheet to its shareholders as part of the total $338 in cash per ordinary share received by shareholders of Enstar.
Following the close of the transaction, Enstar will maintain its current operations and business strategy.
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.
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
Michael Muscolino, Co-Founder and Partner at Sixth Street
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.
Goldman Sachs & Co. is acting as financial advisor to Enstar and Paul, Weiss, Rifkind, Wharton & Garrison and Hogan Lovells US are acting as legal advisors.
Ardea Partners Barclays and J.P. Morgan Securities are acting as financial advisors to Sixth Street and Simpson Thacher & Bartlett, Debevoise & Plimpton and Cleary Gottlieb Steen & Hamilton are acting as legal advisors.
by Yana Keller
