Acquisition of UK Underwriting Franchise and
MGA Platform Strengthens Ambac’s Position as a Leading Specialty
Program Insurance Platform
Ambac Financial Group, Inc. (“Ambac”) (NYSE: AMBC), an insurance
holding company, has signed a definitive agreement to acquire a 60%
controlling stake in Beat Capital Partners Limited (“Beat”), a
London-based insurance underwriting and managing general agency
(MGA) incubation platform, for approximately $282 million, up to
$40 million of which will be paid in shares of Ambac common stock.
The remainder will be paid in cash and is subject to closing
adjustments. The transaction is expected to close in the third
quarter of 2024, subject to regulatory approvals. The transaction
will be financed from available cash and committed financing.
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Ambac President and Chief Executive
Officer Claude LeBlanc (Photo: Business Wire)
Pursuant to the agreement, Ambac will purchase 60% of Beat from
existing shareholders, including Bain Capital and Beat’s management
team. Consistent with Ambac’s philosophy of financial alignment of
interests with its business partners, Beat’s management team and
Bain Capital each will retain an equity stake of approximately 20%
in Beat.
“This is a monumental day for Ambac,” said Claude LeBlanc,
President and Chief Executive Officer of Ambac. “The acquisition of
Beat, which is one of the largest UK independent underwriting
managers, aligns with our vision of being a premier destination for
MGAs and materially accelerates our progress towards our three-year
target of generating in excess of $100 million of annual
EBITDA.
“This acquisition propels Ambac to the forefront of the
specialty program insurance market,” LeBlanc continued. “We are not
simply acquiring a leading specialty underwriting platform; we are
aligning with a team that has proven ability to build and launch
profitable de novo MGAs, which is a core pillar of our growth
strategy. Adding Beat to our platform gives us immediate scale and
a strong pipeline to fuel future growth.”
John Cavanagh, Partner and Chairman of Beat, added: “This is a
transformational partnership for Beat. Ambac’s well-established MGA
incubation and carrier capabilities and its outstanding leadership
team is a perfect fit with Beat’s existing platform and team. This
joint enterprise now represents one of the foremost global
platforms for MGAs and Underwriting Franchises, with a significant
footprint in the US, UK and Bermudan markets and scope to grow into
other geographies. Our aligned capacity, affiliated carrier
capabilities and global licensing offers leading specialty
underwriters who have an absolute focus on underwriting profit the
perfect platform to build their businesses.”
“The Beat team have built an incredible franchise over the past
seven years by balancing exceptional growth with a ceaseless focus
on underwriting performance. We are fortunate to be part of their
journey,” said Matt Cannan, Partner of Bain Capital. “We believe
partnering with Ambac perfectly complements Beat’s capabilities and
creates an outstanding global specialty insurance destination for
top-tier underwriters.”
Cavanagh, an industry veteran and former Global CEO of Willis Re
(now Gallagher Re), will continue to manage the business as part of
the senior Beat leadership team. Beat provides underwriters with a
full range of services including access to capacity,
infrastructure, and partnership with its experienced team, which
guides new businesses through the start-up phase and provides
ongoing oversight and support.
Since its inception in 2017, Beat has launched 13 Underwriting
Franchises and MGAs. In addition, it has certain management rights
for Syndicates 4242 and 1416 at Lloyd’s and an exclusive capacity
relationship with a Bermuda reinsurer (Cadenza Re). Beat’s
businesses produced $533 million in combined gross premiums and
approximately $17 million in EBITDA in 2023.
With the addition of Beat, Ambac’s specialty property and
casualty insurance platform is projected to generate in excess of
$1.4 billion in gross written premiums on a combined full-year 2024
pro forma basis.
Ambac’s specialty property and casualty platform includes
Everspan Group, comprised of several insurance carriers rated A-
(Excellent) by AM Best, and Cirrata Group, an insurance
distribution business with several best-in-class MGAs and a
wholesale broker.
UBS Investment Bank served as Ambac’s financial advisor and
Debevoise & Plimpton LLP served as legal counsel to Ambac.
Evercore served as Beat’s financial advisor and RPC served as legal
counsel to Beat and Bain Capital.
Conference Call
Ambac Chief Executive Officer Claude LeBlanc and Chief Financial
Officer David Trick, along with Beat senior management, will hold a
conference call for Ambac investors on Wednesday, June 5, 2024, at
8:30 a.m. ET. A live audio webcast of the call will be available
through the Investor Relations section of Ambac’s website,
https://ambac.com/investor-relations/events-and-presentations/.
Participants may also listen via telephone by dialing (877)
407-9716 (Domestic) or (201) 493-6779 (International).
About Ambac
Ambac Financial Group, Inc. (“Ambac”) is a financial services
holding company headquartered in New York City. Ambac’s core
business is a growing specialty P&C distribution and
underwriting platform. Ambac also has a legacy financial guaranty
business in run off. Ambac’s common stock trades on the New York
Stock Exchange under the symbol “AMBC”. Ambac is committed to
providing timely and accurate information to the investing public,
consistent with our legal and regulatory obligations. To that end,
we use our website to convey information about our businesses,
including the anticipated release of quarterly financial results,
quarterly financial, statistical, and business-related information.
For more information, please go to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac
contains substantial restrictions on the ability to transfer
Ambac’s common stock. Subject to limited exceptions, any attempted
transfer of common stock shall be prohibited and void to the extent
that, as a result of such transfer (or any series of transfers of
which such transfer is a part), any person or group of persons
shall become a holder of 5% or more of Ambac’s common stock or a
holder of 5% or more of Ambac’s common stock increases its
ownership interest.
About Beat Capital Partners
Beat Capital Partners is a long duration venture capital
investor exclusively focused on the insurance industry, offering
the right individuals and teams start-up funding, infrastructure,
risk capital, and highly rated paper, alongside experienced
guidance and support. Beat has launched eight businesses since its
founding in 2017, which will collectively write gross premiums of
an estimated US $650 million in 2022 and operates Lloyd’s Syndicate
4242. Beat is backed by experienced insurance investors Bain
Capital, Elliott Management and Amwins, as well as its management
team, and is committed to being the best possible partner for
entrepreneurial insurance talent. For more information, see
www.beatcapital.com.
Non-GAAP Financial Reporting
In addition to reporting the Company’s quarterly financial
results in accordance with GAAP, the Company is reporting non-GAAP
financial measures: EBITDA, Adjusted Net Income and Adjusted Book
Value. These amounts are derived from our consolidated financial
information, but are not presented in our consolidated financial
statements prepared in accordance with GAAP. We present non-GAAP
supplemental financial information because we believe such
information is of interest to the investment community, and that it
provides greater transparency and enhanced visibility into the
underlying drivers and performance of our businesses on a basis
that may not be otherwise apparent on a GAAP basis. We view these
non-GAAP financial measures as important indicators when assessing
and evaluating our performance on a segmented and consolidated
basis and they are presented to improve the comparability of our
results between periods by eliminating the impact of the items that
may not be representative of our core operating performance. These
non-GAAP financial measures are not substitutes for the Company’s
GAAP reporting, should not be viewed in isolation and may differ
from similar reporting provided by other companies, which may
define non-GAAP measures differently.
Forward Looking Statements
In this press release, statements that may constitute
“forward-looking statements” within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Words such as “estimate,” “project,” “plan,” “believe,”
“anticipate,” “intend,” “planned,” “potential” and similar
expressions, or future or conditional verbs such as “will,”
“should,” “would,” “could,” and “may,” or the negative of those
expressions or verbs, identify forward-looking statements. We
caution readers that these statements are not guarantees of future
performance. Forward-looking statements are not historical facts
but instead represent only our beliefs regarding future events,
which may by their nature be inherently uncertain and some of which
may be outside our control. These statements may relate to plans
and objectives with respect to the future, among other things which
may change. We are alerting you to the possibility that our actual
results may differ, possibly materially, from the expected
objectives or anticipated results that may be suggested, expressed
or implied by these forward-looking statements. Important factors
that could cause our results to differ, possibly materially, from
those indicated in the forward-looking statements include, among
others, those discussed under “Risk Factors” in our most recent SEC
filed quarterly or annual report.
Any or all of management’s forward-looking statements here or in
other publications may turn out to be incorrect and are based on
management’s current belief or opinions. Ambac Financial Group’s
(“AFG”) and its subsidiaries’ (collectively, “Ambac” or the
“Company”) actual results may vary materially, and there are no
guarantees about the performance of Ambac’s securities. Among
events, risks, uncertainties or factors that could cause actual
results to differ materially are: (1) the occurrence of any event,
change or other circumstances that could give rise to the right of
one or both of the parties to terminate the share purchase
agreement by and among AFG, Cirrata V LLC (the “Purchaser”) and
certain sellers set forth therein; (2) the outcome of any legal
proceedings that may be instituted against the parties to the
transaction; (3) the failure to obtain necessary regulatory
approvals (and the risk that such approvals may result in the
imposition of conditions that could adversely affect the combined
company or the expected benefits of the transaction) or to satisfy
any of the other conditions to the transaction on a timely basis or
at all; (4) the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; (5) diversion of management’s
attention from ongoing business operations and opportunities; (6)
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the transaction; (7) the ability of the parties to
consummate the transaction and the timing of the transaction; (8)
the high degree of volatility in the price of AFG’s common stock;
and (9) other risks and uncertainties that have not been identified
at this time.
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version on businesswire.com: https://www.businesswire.com/news/home/20240605921875/en/
Investors: Charles J. Sebaski Managing Director, Investor
Relations (212) 208-3177 csebaski@ambac.com
Media: Kate Smith Director, Corporate Communications (212)
208-3452 ksmith@ambac.com
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