On the 29th of July 2024, Enstar Groupannounced its decision to be acquired by Sixth Street in a significant merger deal valued at $5.1 billion. The transaction, which includes participation from Liberty Strategic Capital, J.C. Flowers & Co., and other institutional investors, will see Enstar’s shareholders receive $338.00 in cash per ordinary share.
@enstargroup has announced that it has entered into a definitive merger agreement under which Sixth Street will acquire Enstar for $5.1 billion.
The agreed cash offer represents an 8.5% premium over the 90-day volume weighted average price (VWAP) of Enstar shares as of July 26, 2024, the last trading day before the announcement. This offer also reflects a 6.9% premium over the 60-day VWAP. The transaction, which Enstar’s Board has unanimously approved of Directors, is set to close in mid-2025, pending shareholder and regulatory approvals.
Continuity and Strategic Alignment
Following the merger, Enstar will continue its existing operations and business strategy under the Enstar name. The agreement includes a 35-day “go-shop” period, ending on September 2, 2024, during which Enstar’s Board can seek alternative acquisition proposals. However, the company has indicated no intention to disclose developments regarding this process unless required.
EnstarDirector and CEODominic Silvester expressed confidence in the deal, stating, “Over the past 30 years, Enstar has built a strong position in the legacy market. 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.”
A Michael Muscolino, Co-Founder and Partner at Sixth Street, highlighted the firm’s respect for Enstar’s management team, remarking, “Enstar has a proven track record of delivering innovative legacy P&C solutions. We look forward to supporting the Company’s current strategy.”
Financial and Operational Implications
Enstar’s recent second-quarter financial results were released separately, and due to the merger announcement, the company has opted not to provide additional commentary. The transaction will see Enstar returning approximately $500 million from its balance sheet to shareholders as part of the cash offer. Upon completion, Enstar will no longer be publicly listed.
Conclusion
The acquisition of Enstar by Sixth Street marks a significant shift in the insurance industry, reflecting a robust endorsement of Enstar’s legacy business model and operational strategy. The transition to a privately held entity is expected to maintain Enstar’s strategic direction while providing liquidity for its shareholders. The deal, pending final approvals, will redefine Enstar’s future in the global insurance market.
