Enstar Group Limited (NASDAQ: ESGR) recently confirmed that the acquisition and recapitalization of StarStone U.S. Holdings, Inc. has been concluded by selling StarStone U.S. to Core Specialty Insurance Holdings, Inc. in exchange for a cash mix and approximately 25% of Core Specialty stock. Following receipt of regulatory approvals and fulfilment of several other closing requirements, the completion of the deal was achieved.
Investors of Key Specialization have invested $610 million in new venture funding, including SkyKnight Capital, L.P., Dragoneer Investment Fund, Aquiline Capital Partners LLC and other investors, primarily management and directors. The company’s market capitalization would rise to over $900 million in accordance with the rollover of Enstar’s current stake and an increased equity investment of over $60 million from management and other investors.
With respect to StarStone U.S.’ legacy reserves, one of Enstar’s wholly owned companies has entered into a hybrid loss portfolio and unfavourable growth cover reinsurance arrangement in conjunction with Enstar’s contribution to StarStone U.S. to Core Specialization.
Enstar will buy all of Trident V, pursuant to the terms of a recapitalization arrangement entered into in August 2020. In exchange for the bulk of the indirect stake of Enstar in Northshore Holdings Ltd., the holding firm for Atrium, and its associated funds’ interest in Core Specialization. The swap deal is subject to customary regulatory approvals and terms of closure and is scheduled to close in the first half of 2021.