Maiden Holdings, Ltd., a provider of insurance and reinsurance services, and program specialist Kestrel Group have entered into a combination agreement to form a new, publicly listed specialty program group, expected to close in the first half of 2025.
Under the agreement, at the closing of the transaction, each common share of Maiden will be converted into one common share in a newly formed Bermuda company that will acquire both Maiden and Kestrel.
The transaction values Kestrel at up to $167.5 million, including $40 million in upfront cash, $82.5 million in 55 million common shares of the combined company, and an earnout of up to $45 million payable in common shares.
The combined company will be rebranded as Kestrel Group and aims to list its common shares on the Nasdaq. It will be led by Luke Ledbetter (CEO), Terry Ledbetter (Executive Chairman), and Pat Haveron (President and CFO).
Kestrel will continue writing business through its A.M. Best A- FSC XV-rated insurance carriers, including Sierra Specialty Insurance Company, Rochdale Insurance Company, Park National Insurance Company, and Republic Fire and Casualty Insurance Company, all subsidiaries of AmTrust Financial Services. The combined company may also acquire these insurers from AmTrust.
Pat Haveron, CEO and Chief Financial Officer of Maiden, stated, “The combination with Kestrel represents a transformative milestone for Maiden. Kestrel’s balance sheet light, fee revenue model will enable Maiden to realize our vision of delivering a strong fee-based insurance platform while selectively deploying underwriting capacity to optimize returns for shareholders.
“The Ledbetters and the broader Kestrel team have a long and proven track record of success in the specialty program market, and we look forward to partnering with them to deliver value to program managers, MGAs, reinsurers and reinsurance brokers across a range of attractive specialty lines. The transaction provides a unique opportunity for Maiden shareholders to participate in the growth of what we believe will be a significant and differentiated competitor in the specialty insurance market.”
Luke Ledbetter, President and CEO of Kestrel, added, “The combination with Maiden will allow us to accelerate our growth plan and capitalize on favorable market tailwinds as we continue our efforts to become the leading specialty program group in the United States. We believe a balance sheet light, fee revenue model will best position the combined company for future growth. We look forward to working with Pat Haveron and the Maiden team.”
Once the transaction is complete, the combined company’s board of directors will have seven members: four selected by an affiliate of the Ledbetters (including two independent directors), and three selected by AmTrust (including two independent directors).
Maiden has also suspended its share repurchase program in connection with the transaction.
The deal is subject to closing conditions, including shareholder approval from Maiden, the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, approval of the combined company’s Nasdaq listing, and other regulatory approvals.
Assuming certain amendments to Maiden’s bye-laws are approved, shareholders holding about 44.8% of Maiden’s outstanding shares have agreed to vote in favor of the transaction.
Insurance Advisory Partners LLC is the exclusive financial advisor to Maiden, with Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel. Evercore is the exclusive financial advisor to Kestrel, with Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel.
The post Maiden and Kestrel combine to form new publicly listed specialty program group appeared first on ReinsuranceNe.ws.