Sirius International has agreed to merge with US-listed special purpose acquisition firm Easterly Acquisition in a deal that will see Sirius become a publicly listed company.
Under the terms of the agreement, Easterly would merge with a subsidiary of Sirius Group and become a wholly owned subsidiary of the company.
Easterly’s common stock would be exchanged for Sirius Group’s common shares at 1.05x Sirius Group’s pro forma diluted GAAP book value per share as of 30 June 2018, with the proposed all-stock transaction valuing the firm at $2.2bn.
Following the stock swap, current Easterly stockholders will own around 7 percent of the combined company when the transaction closes.
Upon completion of the merger, Sirius Group’s common stock will be traded on the NASDAQ.
Sirius said it plans to grow through casualty, primary and life reinsurance lines once it becomes a publicly traded company.
According to an investor presentation, the global, multi-line carrier is expecting to increase gross written premiums from a projected $1.90bn in 2018 to around $2.28bn in 2020, with the share of “high return growth (re)insurance” set to increase from 7 percent to 15 percent over the period.
In conjunction with the merger announcement, Sirius revealed that its agreement to acquire a controlling interest in Israeli insurer Phoenix Holdings will terminate on or prior to 2 July 2018.
This comes seven months after Sirius struck an agreement with Israeli energy conglomerate Delek Group to acquire an initial 4.9 percent stake in Phoenix Holdings, with an option to purchase Delek’s remaining 47.4 percent interest in the business, with the transaction subject to regulatory approvals.
Commenting on the deal, Sirius Group president, CEO and chairman Allan Waters remarked: “We are pleased to become a public company though our partnership with Easterly,
“Access to the public equity markets will facilitate and accelerate our future growth via M&A transactions and organically.”
“We are excited to bring a company of the scale and stature of Sirius into the public markets,” said Avshalom Kalichstein, CEO of Easterly.
“We believe this transaction will offer tremendous value to our shareholders,” he concluded.
The merger has been approved by the boards of directors of both Sirius Group and Easterly and is expected to close at the end of the third or the beginning of the fourth quarter of 2018, subject to any necessary approvals.
Sirius Group is a Bermuda-based holding company with (re)insurance operating subsidiaries in Bermuda, Stockholm, New York and London. It wrote $1.4bn of gross premiums in 2017.
Sirius Group’s principal equity holder is CMIG International, the Singapore-based investment arm of China Minsheng Investment Corporation.