Onex completes purchase of Accredited
The long-awaited sale of programme manager Accredited to private equity firm Onex has been completed - although it took the liquidation of Accredited parent company R&Q Insurance Holdings to make it happen.
A statement from the companies said Accredited will now operate as an independent programme management company providing A- rated (AM Best) insurance capacity in Europe, the UK and the US. Accredited writes more than $2.1 billion of gross premium and partners with MGAs on over 70 programs.
The announcements brings to a close a tortuous sale process. R&Q initially announced the $465 million sale of Accredited to Onex Partners last year. R&Q then planned to continue in business as a legacy insurer.
However, the deal was stalled when the Bermuda Monetary Authority said it wanted to review the reserves R&Q would retain. It also prevented R&Q from completing two legacy transactions and a debt repayment.
R&Q announced earlier this month it would go into liquidation in order to complete the sale, although doing so meant there would be no value left for shareholders or creditors.
William Spiegel, who will now be chief executive officer of Accredited and was CEO of R&Q, said of the Accredited sale: "As an independent platform, we will continue to partner with best-in-class MGAs and reinsurers, supported by our global scale, strong balance sheet and A- AM Best financial strength rating. Our strategy remains unchanged; we will focus on supporting the growth of our MGA partners and delivering high quality, diversified business to our reinsurance partners.”
Adam Cobourn, Managing Director at Onex Partners,added: "Accredited has established itself as a leading program manager with a differentiated transatlantic footprint, a well-diversified and high-quality book of business, deep reinsurer relationships and robust underwriting and risk management protocols. We look forward to partnering with Accredited’s management and employees to strengthen and grow the business. As an independent company,
"Accredited will be well positioned for responsible growth with a strong balance sheet and backing from Onex Partners.”
Earlier today, Enstar Group said it had agreed to reinsure legacy business written by Accredited, paving the way for the sale of Accredited.
The move came as R&Q entered provisional liquidation in order to force through the previously agreed sale of Accredited. It has also been announced that Teneo (Bermuda) has been appointed joint provisional liquidators of R&Q.
Enstar said it has also provided reinsurance in connection with the acquisition of Accredited by Onex Partners.
The reinsurance addresses Accredited’s assumed and underwritten legacy deals, comprising diversified portfolios, including asbestos, general casualty, workers’ compensation, and other exposures in both the US and the UK/European markets, Bermuda-based Enstar said.
The reinsurance provides cover for net reserves of approximately $234 million, with all administrative duties and claims handling transferring to Enstar.
The closing of the transaction, in which Guy Carpenter acted as the broker, followed the closing of the broader acquisition of Accredited by Onex Partners and receipt of regulatory approvals and satisfaction of other closing conditions, Enstar said.
Dominic Silvester, Enstar’s Chief Executive Officer, said: “This partnership with Onex is a strong example of how Enstar can step in to facilitate broader M&A transactions in support of our partner’s long-term strategic goals. The legacy arrangement will enable Accredited to continue to focus on serving its programme management business with a strong capital base.”
Teneo was appointed as JPL of R&Q in the Bermuda Supreme Court yesterday.
Michael Morrison, Mark Allitt and Charles Thresh will oversee the liquidation and ultimately the winding up of the company.
Shortly after the appointment of the JPLs, the company said, Jeffrey Hayman,Spiegel, Tom Solomon, Philip Barnes, Eamonn Flanagan, Jo Fox, Lawrence Hirsh, Jerome Lande and Robert Legett resigned as directors of the company.
R&Q said Deutsche Numis informed the company of its intention to resign as nominated adviser and broker to the company with immediate effect.
The company's shares remain suspended from trading and pursuant to AIM Rule 1, if a replacement nominated adviser is not appointed within one month, the admission of the company's shares to trading on AIM will be cancelled, R&Q said.
The company said it has no intention of appointing a replacement nominated adviser.
A spokesman for R&Q said: “As a consequence of the provisional liquidation, it's anticipated that there will be very little, if any, chance of any value accruing to the company's shareholders.”
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