Majestic Capital, Ltd., formerly known as CRM Holdings, Ltd., has agreed to be bought by Bayside Capital Partners LLC for 45 cents per share in cash, or about $7.8 million.

Majestic, incorporated in Bermuda, has executive offices in the Town of Poughkeepsie at Oakwood Commons. It is a specialty provider of workers' compensation insurance. It has been losing money, according to its financial reports from recent quarters.

The 45 cents per share in cash purchase price is a premium of 105 percent to Majestic Capital's stock closing price Monday of 22 cents, the company said.

Bayside Capital Partners is a holding company, the principal members of which are Lancer Financial Group Inc., David and Timothy Delaney, and individuals who are, in some cases, shareholders of Lancer, Majestic said.

The deal is expected to close in the first quarter of 2011, but requires approval of Majestic Capital's shareholders and regulators. One contingency in the deal, according to the release, is the modification of Majestic Capital's lease for office space in Poughkeepsie "on terms that are acceptable to Bayside Capital Partners." Lancer Financial has provided a financing commitment to Bayside for the full amount.

Majestic CEO James Scardino said in a statement, "This transaction delivers a substantial premium to market price for our shareholders in circumstances in which it has been difficult for us to generate alternatives from the capital markets. After a careful review of our strategic alternatives, our board has concluded that this transaction provides the best opportunity to enhance shareholder value.

"The strategic relationship with Bayside Capital Partners, its members and Lancer Financial will allow us to improve profitability and take advantage of current market opportunities. It will also provide us with attractive long-term opportunities for our employees, customers and business partners," Scardino said.