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Enstar in $100mn secondary offering

Acquisitive run-off specialist Enstar Group Ltd has announced plans to raise around $105mn with a new public share issue.

In an announcement to the Securities & Exchange Commission, Bermudian Enstar announced it would be selling 1.2 million shares at a price of $87.50.

The announcement follows the Bermudian run-off specialist’s announcement of a $90mn deal to acquire failed UK-listed (re)insurer GoshawK earlier this month.

A spokesman for Enstar said it expected the shares to be issued from the beginning of July.

“All of the shares will be sold by Enstar and none of the shares will be sold by Enstar’s existing shareholders,” said the spokesman.

Enstar has also granted the underwriters of the share issue a 30-day option to purchase an additional 180,000 ordinary shares.

The issue will be managed by Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC as book-running manager and Dowling & Partners Securities, LLC as co-manager.

The run-off specialist’s share price has fallen in recent months from a high of $121.98 in May, however, to hover around the $90 mark.

Last year, the firm reported a drop in its full-year profits despite seeing its asset base grow by a third through acquisitions.

Enstar’s net earnings for 2007 were $61.8mnn in 2007, down from $82.3mn in the prior-year period.

The company currently has a $1.2bn market capitalisation with around 13.9 million issued shares.

The GoshawK deal – funded by a $60mn credit facility provided by National Australia Bank Ltd and a £22.9mn ($45.7mn) irrevocable standby letter of credit from JPMorgan – continues Enstar’s active acquisition strategy in the legacy sector.

Earlier this year the company acquired RSA’s Guildhall Insurance Co for $64mn. It also received approval for its previously announced $518mn buyout of AMP Ltd’s Australian-based closed (re)insurance operations.

The group is also backing Lloyd’s reinsurance to close (RITC) provider Shelbourne Group with a 50.1 percent shareholding.

Since its formation in 2001, Enstar has completed over twenty legacy acquisitions in Bermuda, the UK, Australia, Switzerland and the US.

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