Randall & Quilter Investment Holdings (R&Q) is to be acquired by shareholder Brickell PC Insurance Holdings following an agreement on the terms of a recommended cash acquisition, in addition to US$100 million of new equity funding.
The acquisition will be undertaken as a merger under the Bermuda Companies Act, where Brickell PC2 Insurance Holdings will be incorporated in Bermuda and then merged with R&Q, which will then operate as an indirect wholly-owned subsidiary of Brickell.
Under the agreed terms, each R&Q shareholder is entitled to £1.75 in cash for each R&Q share. The firm’s existing issue share capital is valued at approximately £482 million. Barclays and Numis Securities acted as financial advisors to R&Q during the deal.
The new equity funding will be used to de-lever R&Q’s balance sheet and to improve the group’s financial profile, following a review of its legacy insurance portfolio by the new management.
Last year, R&Q’s legacy insurance business launched Gibson Re, a Bermuda-domiciled collateralised reinsurer supporting approximately US$2 billion of reserves.
Commenting on the acquisition, Brickell chairman Steven Pasko explains: “We have enjoyed a strong relationship with R&Q as a shareholder since 2019 and further supported the business with an infusion of capital in 2020.
“We are excited about the prospect of integrating R&Q into our robust insurance ecosystem and expanding our business into the legacy space, by combining R&Q’s deep experience in managing complex run-off claims with our principal economic investor’s unique asset management capabilities.”
William Spiegel, executive chairman of R&Q, adds: “This acquisition demonstrates the strength of both our business today and the opportunities ahead of us. The value Brickell sees in R&Q is testament to the clear strategic vision we have outlined, the quality of our legacy insurance and programme management businesses and the skills and expertise of our people.
“In addition to enabling our shareholders to realise attractive value, we also believe that an acquisition by Brickell would be an excellent outcome for our trading partners and employees, with Brickell’s existing presence and significant ambitions in the fronting and legacy sectors highly complementary to our business.”
