Max Capital Group Ltd. is set to join a group of Bermuda insurers that have bought their way into the London market after it announced an agreement to take over Lloyd's operation Imagine Group (UK) Ltd.

The agreement also includes the acquisition of Imagine Lloyd's operations in Denmark and Japan.

Imagine Lloyd's, through Lloyd's Syndicates 1400, 2525 and 2526, underwrites a diverse portfolio of specialty risks, including property catastrophe, financial institutions, personal accident, employers' and public liability, and professional indemnity business.

Based in London, the business Max Capital has agreed to acquire will complement the company's current operations in Bermuda, Ireland and the US.

Marston (Marty) Becker, chairman and cheif executive officer of Max Capital, said: "This Lloyd's operation is an ideal fit for Max. Through this acquisition, we will further diversify our business and achieve access to the important benefits of Lloyd's market participation.

"We are impressed by Imagine Lloyd's talented underwriting team, led by underwriting director Matthew Petzold, and that team's commitment to controlled growth, which dovetails well with Max's long-standing policy of disciplined underwriting and prudent investing."

Iain Bremner, managing director at Imagine Lloyd's, said: "We are pleased to be joining Max Capital and look forward to working with them to build for the future. I believe that what we have created at Imagine Lloyd's will enhance Max Capital's already well-regarded insurance and reinsurance operations and that being part of the Max Capital organisation will bring us opportunities to develop our business further.

"Our managed syndicates, including their third-party capital providers, can be expected to benefit over time from the strength of the combined group."

Total transaction consideration is expected to be about £11 million paid in cash derived from ongoing operations.

In addition, Max Capital will replace letters of credit totaling approximately £90 million that an affiliate of Imagine has provided to fund Imagine Lloyd's syndicate commitments.

The acquisition depends on various approvals, including those from the Financial Services Authority and Lloyd's, and following completion of the transaction, Imagine Lloyd's is expected to be re-branded as 'Max Lloyd's Ltd'.

Merrill Lynch & Co. acted as financial advisor to Max Capital on the transaction.