Japan’s Sompo Holdings to Sell Sompo Canopius for $952M to Centerbridge

By | September 1, 2017

Japan’s Sompo Holdings Inc. announced it has agreed to sell Lloyd’s re/insurer Sompo Canopius AG to a private equity consortium led by Centerbridge Partners for $952 million.

On completion of the purchase, Canopius will become a standalone business led by incumbent Executive Chairman Michael Watson and Chief Underwriting Officer Mike Duffy.

Disposal of Canopius is part of Sompo’s wider strategic plan, returning cash to provide Sompo increased flexibility for its growth ambitions, while also creating a secure future for Canopius, Sompo said in a statement. Sompo International’s Lloyd’s business (previously called Endurance at Lloyd’s) will not be affected by the deal.

Canopius was originally formed via a management buyout in December 2003 and was purchased in 2014 by Sompo Japan Nipponkoa Insurance, a wholly owned subsidiary of Sompo Holdings, for £594 million ($766.5 million). Sompo Canopius is one of the top 10 insurers in the Lloyd’s insurance market, writing in excess of $1.6 billion premium in 2016, Canopius said in a statement.

The transaction is expected to close in the first quarter of 2018, subject to regulatory approvals.

“Following the announcement of the acquisition of Endurance Specialty Holdings in October 2016, we carefully reviewed the potential for Sompo Canopius to be integrated into the new global, commercial business platform, Sompo International,” said Kengo Sakurada, president and group CEO of Sompo Holdings Inc.

“However, it became increasingly clear that the culture and business mix of the two companies were very distinct and that the combination would not necessarily be advantageous to either party,” he added.

“We are delighted to have reached the agreement announced today with Centerbridge, one which recognizes the value inherent in Canopius, and takes full advantage of the strengths of the existing management team,” Sakurada said. “The future of the staff has been a key consideration in this process. We believe having a financial partner such as Centerbridge represents a great opportunity for Canopius to achieve its growth ambitions.”

He noted that the transaction returns “significant funds to Sompo,” which will enable it to pursue its global strategic objectives through Sompo International.

Discussing the new path for Canopius, Duffy said the company “will continue to focus on those classes where we add value to our clients and brokers and seek profitable diversification through the recruitment of new teams and entry into new classes.”

“We are very pleased to announce the acquisition and greatly look forward to working with Michael Watson and all the team at Canopius,” said Ben Langworthy, senior managing director at Centerbridge.

“We believe that Canopius’ expertise and successful track record in the global insurance market offers a compelling proposition in the insurance space,” Langworthy continued.

“Canopius is an established and high quality global re/insurer, offering skilled underwriting, excellent risk management and a truly open-minded approach. Our aim will be to support continuity of the management team and business to build on the very impressive success achieved to date,” he went on to say.

Sompo Canopius operates in the UK, Ireland, Netherlands, Switzerland, Bermuda, U.S. and Singapore.

Source: Sompo Canopius/Sompo Holdings

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