Canadian marine insurance and shipping investment company Fairfax Financial Holdings has sold run-off insurer RiverStone Europe in a $750m deal.
Prem Watsa-owned Fairfax and OMERS, the pension plan for Ontario's municipal employees, are selling their total holdings to CVC Capital Partners.
RiverStone specialises in managing insurance companies that are being closed.
In June, Norwegian protection and indemnity insurer Skuld sold its Lloyd’s of London syndicate to RiverStone.
This was the result of a tender handled by Willis Towers Watson Securities. It followed Skuld’s decision to put the Skuld Syndicate 1897 into run-off last year.
Oslo-based Skuld said that there were a number of bidders for its syndicate which it decided to wind down after a series of heavy losses.
Extra cash for Fairfax
As part of the CVC deal, Fairfax will also be entitled to receive up to $235.7m post-closing under a contingent value instrument.
Luke Tanzer will remain managing director of RiverStone Europe and Nick Bentley, the chief executive of the wider RiverStone Group, will remain on the board.
RiverStone Europe will also operate under the name RiverStone International after the deal closes, and will seek to continue its successful track record of acquisitions and growth led by its existing management team, Fairfax said.
Fairfax CEO Watsa said: "CVC’s scale and vision will give RiverStone Europe, under the continued leadership of Luke and his management team, the opportunity to further grow the business."
Tanzer and Bentley were fully supportive of this transaction, based on their strong belief that it was the best way for the company to continue to grow and pursue run-off transactions, Watsa added.
Still committed to Lloyd's of London operations
He added that Fairfax remains committed to continuing to grow its other European businesses, including its Lloyd's of London activities.
Peter Rutland, managing partner and head of financial services at CVC, added: "We have got to know RiverStone and Fairfax over many years, and are delighted to now have the opportunity to work with Luke Tanzer and his experienced team."
Wide interests
Fairfax remains a big player in the Lloyd's of London insurance market. It is also the biggest shareholder in Canada's Atlas Corp, the owner of boxship company Seaspan.
The group is also a major shareholder of Greek shipping lender Eurobank and a big investor in Indian tanker owner Seven Islands Shipping.
In 2015, the company won support for its $1.88bn bid for insurer Brit from the target company's private equity backers Apollo Global and CVC, only a year after floating on the London Stock Exchange.
