Mergers and Acquisitions: A New Era for Specialty Programme Groups
In a significant move, Maiden Holdings and Kestrel Group have agreed to merge, paving the way for a new publicly listed specialty programme group. This strategic partnership will create a Bermuda-based entity, which will acquire both Maiden and Kestrel, with Maiden’s common shares being converted into the right to secure shares in the new company.
A Valuation of $167.5m
The deal assigns a value of up to $167.5m to Kestrel, comprising $40m in cash, 55 million common shares of the new company valued at $82.5m, and an earnout of up to $45m payable in common shares. This valuation is a testament to the growth potential of the combined entity.
Leadership Team Announced
The merged entity, operating under the name Kestrel Group, will have its shares listed on Nasdaq. The leadership team will consist of Luke Ledbetter as CEO, Terry Ledbetter as executive chairman, and Pat Haveron as president and CFO. This experienced team will drive the company’s growth strategy forward.
Business Operations
Post-merger, Kestrel will maintain its business through A.M. Best A- FSC XV insurance carriers, which are subsidiaries of AmTrust Financial Services. Additionally, the combined company will have the option to acquire these insurers from AmTrust, providing further opportunities for expansion.
Board of Directors
The board of directors for the new entity will comprise seven members, with four selected by an affiliate of the Ledbetters, including two independents, and three chosen by AmTrust, including two independents. This diverse board will provide strategic guidance to the company.
Deal Completion
The completion of the deal is anticipated in the first half of 2025, contingent upon several conditions such as approval from Maiden shareholders, the expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, Nasdaq listing approval, and other regulatory clearances.
Advisors
Insurance Advisory Partners acted as the financial advisor to Maiden for the deal, with Paul, Weiss, Rifkind, Wharton & Garrison providing legal counsel. Appleby advised the disinterested members of Maiden’s Board. Kestrel received financial advice from Evercore, while Skadden, Arps, Slate, Meagher & Flom handled its legal matters.
Executive Insights
Maiden CEO and CFO Pat Haveron expressed enthusiasm for the partnership, citing the Ledbetters’ proven track record of success in the specialty programme market. Kestrel president and CEO Luke Ledbetter stated that the combination with Maiden will allow the company to accelerate its growth plan and capitalize on favourable market trends.
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