LONDON, UK: Brickell PC Insurance Holdings agreed the terms of a recommended cash acquisition of the entire issued ordinary share capital of Randall & Quilter Investment Holdings (R&Q) as well as $100 million of new equity funding.

The acquisition will be undertaken by way of a merger under the Bermuda Companies Act. Under the terms of the acquisition, each R&Q shareholder will be entitled to receive 175 pence in cash for each R&Q share valuing R&Q’s existing issued share capital at approximately £482 million.

Commenting on the acquisition, Steven Pasko, Chairman of Brickell, said: “We have enjoyed a strong relationship with R&Q as a shareholder since 2019 and further supported the business with an infusion of capital in 2020. We are excited about the prospect of integrating R&Q into our robust insurance ecosystem and expanding our business into the legacy space, by combining R&Q’s deep experience in managing complex run-off claims with 777’s unique asset management capabilities.”

Randall & Quilter Investment Holdings (R&Q) has been operating in the insurance industry for over 30 years and is a leading non-life global specialty insurance company focusing on Program Management and Legacy Insurance businesses. The company is incorporated in Bermuda, with operations in the US, UK, Europe and Bermuda and has 308 employees across 8 offices.

Brickell and its affiliates currently have a 23.2% shareholding in R&Q but 9.9% voting rights in R&Q. In March 2019, Brickell made its initial investment in R&Q by acquiring a 9.0% shareholding.

In April 2020, Brickell purchased an additional $80 million of exchangeable preferred stock of R&Q affiliate. In January 2021, Brickell exchanged the preferred stock to equity in R&Q but remained at 9.9% voting interest in R&Q following the receipt of relevant regulatory approvals.

As a result of the terms of the conversion documents and R&Q’s Bye-laws, Brickell and its affiliates currently only have the ability to exercise voting rights equal to 9.9% of the current total voting rights in R&Q without obtaining relevant regulatory approvals.

Brickell is controlled by Steven W. Pasko who has over thirty five years of financial services experience. Brickell’s principal economic investor is 777 Partners LLC. 777 is a global investment firm headquartered in Miami, Florida.

The firm invests across six verticals; insurance, consumer and commercial finance, litigation finance, sports media and entertainment, aviation, and direct lending.

As 777’s non-voting ownership interest in Brickell does not include any ability for 777 to exercise board control or any other ability to direct or cause the direction of management or policies of Brickell, 777 does not exercise control over Brickell.

Brickell PC2 Insurance Holdings Limited will be incorporated in Bermuda in 2022 for purposes of merging with R&Q. Brickell PC2 Insurance Holdings Limited will merge with and into R&Q with the result that R&Q will be the surviving company of the Merger.

As a result of the Merger, R&Q will become an indirect wholly-owned subsidiary of Brickell. After completion of the Merger, R&Q would be owned by Brickell which will then be the holding company of both R&Q and Brickell’s other existing insurance operations.

Commenting on the acquisition, William Spiegel, Executive Chairman of R&Q, said: “Having agreed with Brickell the terms for a recommended cash acquisition of R&Q and $100 million new equity funding, the Board of R&Q is unanimous in its belief that this represents the best outcome for our shareholders.

The acquisition provides shareholders the opportunity to crystallise the value of their holdings, in cash, and at a material 20% premium to our undisturbed share price, and a substantial 1.82x multiple of expected FY 2021 Tangible Net Asset Value per share, while also providing $100 million in new equity funding to de-lever our balance sheet and improve our financial profile.

Furthermore, the offer demonstrates the strength of both our business today and the opportunities ahead of us. The value Brickell sees in R&Q is testament to the clear strategic vision we have outlined, the quality of our Legacy Insurance and Program Management businesses and the skills and expertise of our people.

Brickell is a long-term strategic partner that has a deep understanding of our business and our markets, and has bought into our five-year plan to transform R&Q into a fee-based, capital lighter business.

In addition to enabling our shareholders to realise attractive value, we also believe that an acquisition by Brickell would be an excellent outcome for our trading partners and employees, with Brickell’s existing presence and significant ambitions in the fronting and legacy sectors highly complementary to our business.

I would like to thank our people for their ongoing commitment as we continue to focus on business as usual and delivering our strategy.”