Sirius set to go public in merger deal
Bermudian-based insurance holding company Sirius International Insurance Group Ltd is to merge with asset management company Easterly Acquisition Corp.
The combination will result in Sirius becoming a publicly listed company, with shares to be listed on the Nasdaq Stock Exchange.
The move comes as Sirius, which is controlled by Chinese investors, announced that its agreement to buy a controlling stake in Israeli insurer Phoenix Holdings is set to be terminated by next Monday.
Sirius was sold two years ago for $2.6 billion by White Mountains Insurance Group to China Minsheng Investment Corp.
Sirius Bermuda Insurance Company is the main operating company in the group, which wrote $1.44 billion of gross written premiums last year. The group also has offices in London, New York and Stockholm.
Easterly is based in Beverly, Massachusetts and under the terms of the deal the US asset manager would merge with a subsidiary of the Sirius Group.
On closing of the merger, Easterly’s common stock would be exchanged for Sirius Group’s common shares at a price of 1.05 times Sirius Group’s pro forma diluted book value per share as of June 30, 2018.
The all-stock transaction would yield a combined entity with a market capitalisation of about $2.2 billion at closing, with Easterly stockholders owning approximately 7 per cent of the combined company.
“We are pleased to become a public company though our partnership with Easterly,” said Allan Waters, chief executive officer and chairman of Sirius Group.
“Access to the public equity markets will facilitate and accelerate our future growth via M&A transactions and organically.”
Easterly has scheduled a special meeting of its stockholders for June 28 to approve an extension of time to complete a business combination through November 30, 2018.
“Assuming that Easterly’s stockholders approve the extension period, Sirius Group has agreed to lend to Easterly 3 cents per month through the extension period for each public share that is not redeemed at Easterly’s special meeting of its stockholders on June 28, 2018,” Sirius stated.
Avshalom Kalichstein, CEO of Easterly, said: “We are excited to bring a company of the scale and stature of Sirius into the public markets. We believe this transaction will offer tremendous value to our shareholders.”
Easterly will deposit such loan proceeds into its trust account upon receipt. The loan will be forgiven if the merger does not close by November 30, 2018.