Bermuda-based Enstar Group Ltd. yesterday announced that its subsidiary Royston Run-Off Limited had completed the acquisition of Unionamerica Holdings Ltd. for $341.3 million.

The Enstar Group specialises in buying insurance operations that are distressed or in run-off, that is, having ceased to write new business.

Enstar acquired Unionamerica from St. Paul Fire and Marine Insurance Company, an affiliate of The Travelers Companies, Inc. Unionamerica is comprised of the discontinued operations of Travelers' UK-based London Market business, which were placed into run-off between 1992 and 2003.

The purchase price was financed by $184.6 million of bank financing (including costs of $6.9 million) provided to Royston through a previously announced term facilities agreement; approximately $49.1 million from J.C. Flowers II L.P. and some $114.5 million from available cash on hand.

The Flowers Fund is a private investment fund for which JCF Associates II L.P. is the general partner and J.C. Flowers & Co. LLC is the investment advisor. JCF Associates II L.P. and J.C. Flowers & Co. LLC are controlled by J. Christopher Flowers, a director and one of Enstar's largest shareholders.

In addition, John Oros, a director and Enstar's executive chairman, is a managing director of J.C. Flowers & Co. LLC. The Flowers Fund has a 30 percent non-voting equity interest in the direct parent company of Royston.