James River Group to sell JRG Re to Fleming in $277m deal
Bermudian-based James River Group Holdings Ltd has entered into a definitive agreement to sell JRG Reinsurance Company Ltd, its third-party casualty reinsurance business, to Fleming Intermediate Holdings.
The company said the total estimated transaction value is $277 million, inclusive of a $139 million pre closing dividend and a $138 million cash payment from Fleming at close.
Under the terms of the transaction, valued as of September 30, James River would receive 0.75x the book value of JRG Re at closing.
James River said the transaction includes the full insurance entity supporting the company’s casualty reinsurance segment, including the remaining assets and liabilities, as well as the staff supporting the business.
The segment produced $85.2 million of gross written premiums in 2022.
Frank D’Orazio, chief executive officer, said: “Today’s announcement represents a key milestone for James River and is strategically significant for both our company and Fleming.
“The transaction aligns with James River’s strategy to focus our resources on core businesses where we have meaningful scale, including our E&S and fronting businesses.
“We are excited about the new partnership with Fleming, which we believe will be a great new home for the staff of JRG Re.”
Eric Haller, CEO of Fleming, said: “Fleming’s acquisition of JRG Re is highly strategic in providing complementary infrastructure and significant scale that will enable us to better serve our existing and prospective cedents.
“We have tremendous respect for the entire James River organisation and look forward to welcoming the JRG Re team and continuing to be great partners to all of JRG Re’s existing counterparties following the close of the transaction.”
Fleming is a portfolio company of Altamont Capital Partners, a private equity firm with over $4 billion of capital under management and significant experience investing in the insurance sector.
The transaction has been unanimously approved by the board of directors of both companies.
It is subject to customary closing conditions including receipt of required regulatory approvals.
It is expected to close during the first quarter of 2024.
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