BY Richard Summerfield
Investment funds associated with Apollo Global Management have agreed to acquire Aspen Insurance Holdings Ltd in an all-cash transaction valued at $2.6bn.
The deal, which has been approved by Aspen’s board of directors, will see the Apollo Funds acquire all of the outstanding shares of Aspen for $42.75 per share in cash. The transaction is expected to close in the first half of 2019, subject to the approval of regulators and Aspen’s shareholders, as well as the satisfaction of other closing conditions. The funds are paying around a 7 percent premium to Aspen’s closing share price on the day before the deal was announced.
“We are tremendously excited for the Apollo Funds to acquire Aspen,” said Alex Humphreys, a partner at Apollo. “We believe that Aspen benefits from strong underwriting talent, specialized expertise and longstanding client relationships which makes them well positioned in the market. We look forward to working with Aspen to build on the existing high quality specialty insurance and reinsurance business and we aim to leverage Apollo’s resources and deep expertise in financial services to support the company as it embarks on its next chapter.”
“We are delighted to have reached this agreement with the Apollo Funds,” said Glyn Jones, chairman of Aspen’s board of directors. “This transaction, which is the outcome of a thorough strategic review by Aspen’s board of directors, provides shareholders with immediate value and will allow Aspen to work with an investor that has substantial expertise and a successful track record in the (re)insurance industry.”
“This transaction is a testament to the strength of Aspen’s franchise, the quality of our business and the talent and expertise of our people,” said Chris O’Kane, Aspen’s chief executive. “Under the ownership of the Apollo Funds, Aspen will have additional scale and access to Apollo’s investment and strategic guidance, which will help us to accelerate our strategy and take Aspen to the next level. We are excited about the future as we embark on a new chapter in our history with a partner that understands our strengths, culture and customer-centric philosophy.”
Aspen has been up for sale for some time and Apollo has long been touted as a potential acquirer for the company. Aspen reported a loss of about $15m in the second quarter of 2018, continuing its run of poor financial returns. The company has suffered losses in three out of the last four quarters, having been adversely affected by hurricanes, wildfires and earthquakes.