An investment group from China will buy a big stake in in Ironshore Inc., a billion-dollar insurance holding company led by former AIG executives that filed plans for a $100 million IPO in June.
Fosun International Ltd. has agreed to snatch up 20 percent of Ironshore’s total outstanding ordinary shares on a fully diluted basis, according to the deal announcement. Plans call for using the cash infusion to pay for share repurchases from existing long-term private equity and other shareholders.
As of March 31, 2014, Ironshore reported having $4.2 billion of cash and invested assets, total assets of $6.2 billion and total shareholder’s equity attributable to common shareholders of $1.8 billion, according to the prospectus filed with the U.S. Securities and Exchange Commission for its planned initial public offering.
Ironshore CEO Kevin Kelly said in a statement that the deal will make Fosun a “core long-term strategic investor,” and that the Shanghai firm will give the company a “global perspective with valuable Asian market connections combined with a very strong investment management record.”
Fosun Chairman Guo Guangchang, in turn, said in a statement that the deal will let Focus “further expand its insurance business and strengthen its comprehensive financial capabilities.”
Launch in 1992, Fosun has over one-third of its total investment assets focused on insurance, including Yong’an P&C Insurance, Pramerica Fosun Life Insurance, Peak Reinsurance and Fidelidade Group, Portugal’s biggest insurance company, the deal announcement noted.
Ironshore, which debuted in 2006 with more than $1 billion in private equity capital behind it, insures a number of lines in the U.S. and in international markets, including professional and management liability, property, healthcare liability, environmental, specialty casualty and construction, aviation, political risk, surety, financial institutions liability, media and technology, marine, war and terrorism. Ironshore operates in the United States, Canada, the United Kingdom, Ireland, Europe, Singapore, Australia, Hong Kong and Latin America, according to its IPO prospectus.
Ironshore’s Pembroke Syndicate 4000 operates within Lloyd’s.
Ironshore is led by Kelley and President Shaun Kelly, executives who left American International Group during the financial crisis. At the time of its IPO disclosure in June 2014, Irving Place Capital Mangement LP and Calera Capital Advisors LP were listed as major company investors.
Hollmer is an editor with CarrierManagement.com, where this article first appeared.