Bermudian run-off specialist Premia Holdings Ltd has entered into an agreement to acquire Armour Re Ltd in an all-share transaction.

Armour Re is also Bermudian-based and is a property and casualty legacy reinsurer and subsidiary of Armour Group Ltd, a portfolio company of Aquiline Capital Partners.

Premia will acquire Armour in a two-part transaction. Initially, Armour will transfer certain service contracts and staff members to Premia. Premia will then acquire 100 per cent of Armour Re Ltd in exchange for Premia shares.

In addition to the acquisition, an Aquiline-led investor group is to make a growth equity investment in Premia.

Bill O’Farrell, chief executive officer of Premia, said: “We believe this transaction is a major milestone for Premia to further consolidate its position as a leading legacy P&C reinsurer.

“The Armour acquisition accelerates the build out of our US and European operations. Premia is also excited to be partnering with Aquiline, one of the pre-eminent investors in the insurance sector. We look forward to welcoming the staff and our new shareholder into the Premia family”.

Chris Collins, managing director of Kelso & Company, Premia’s majority shareholder, said: “Bill O’Farrell and team have built Premia into a differentiated, industry leading run-off reinsurer since we founded the company with Arch and management in 2017. The Armour transaction is highly strategic in enhancing Premia’s capabilities and providing additional capital to accelerate growth. Premia is well-positioned to capitalise on the attractive opportunity in the P&C run-off market, and we are excited to continue to support Bill and the Premia team while welcoming a new shareholder in Aquiline.”

Jeff Greenberg, chairman and chief executive officer at Aquiline, said: “ We are excited to partner with Bill and the Premia team, who we believe are best-in-class in the P&C legacy market. We are also excited to partner with Kelso and Arch who are well respected insurance industry investors. Our decision to invest in Premia reflects our belief that the P&C legacy sector will continue to be highly attractive.”

TigerRisk Capital Markets & Advisory is acting as exclusive financial adviser to Armour on the transaction. Clifford Chance and DLA Piper are acting as legal advisers to Armour and Premia, respectively.