Ironshore has agreed to buy out America’s twelfth largest surety bond business.

The Bermudian insurer already had a 20 per cent stake in Lexon Surety Group and will use cash on hand to purchase the remaining 80 per cent of the firm’s equity.

Ironshore initially invested in Tennessee-based Lexon in 2013 and built up its stake to 20 per cent the following year.

Ironshore itself was acquired by Chinese investment company Fosun International Ltd last year.

“Our strategic alliance with Lexon over the past three years has benefited Lexon’s producers and customers and we look forward to enhancing our services for them in the years ahead,” Kevin Kelley, Ironshore’s chief executive officer, said.

“This acquisition also reflects close collaboration between Ironshore and Fosun International Ltd, continuing to support efforts to broaden Ironshore’s business.”

Lexon, based in Nashville, is a privately-held insurance holding company. Its network of agents and brokers underwrites more than $135 million in direct written premium annually in 49 states, Washington, DC and US properties located overseas.

“Ironshore’s acquisition of Lexon is a culmination of our plan to enter the surety market through an established company with a strong customer franchise, diverse product mix and capable management team,” Paul Giordano, chairman, Ironshore Political Risk, Special Risk and Surety, said.

David Campbell, CEO of Lexon, said: “Our relationship with Ironshore has been a positive, welcome factor in furthering our expansion goals and robust underwriting capabilities to meet sector demand from our distribution platform.”