Fairfax Announces Sale of RiverStone Europe to Private Equity Firm CVC

December 2, 2020

Fairfax Financial Holdings Ltd. announced it has entered into a binding agreement with CVC Capital Partners (CVC) to sell all of its interests in RiverStone Europe to private equity firm CVC Capital Partners for approximately $750 million.

Fairfax also will be entitled to receive up to US$235.7 million, post-closing, under a contingent value instrument.

OMERS, the pension plan for Ontario’s municipal employees, has also agreed to sell all of its interests in RiverStone Europe as part of the transaction.

Luke Tanzer will remain the managing director of RiverStone Europe, and Nick Bentley, the chief executive officer of the RiverStone Group, will remain on the board of RiverStone Europe, post-closing.

After closing, RiverStone Europe will also operate under the name RiverStone International and will seek to continue its successful track record of acquisitions and growth led by its existing management team.

“RiverStone Europe is an industry leader in run-off insurance services, and CVC’s scale and vision will give RiverStone Europe, under the continued leadership of Luke and his management team, the opportunity to further grow the business,” said Prem Watsa, chairman and chief executive officer of Fairfax.

Watsa said Fairfax “remains committed to continuing to grow its other European businesses, including its Lloyd’s of London activities.”

“I am extremely happy to partner with CVC in this next chapter of our development,” said Luke Tanzer, managing director of RiverStone Europe, adding that the transaction will provide the company with a runway for further growth.

“We look forward to joining the CVC family and benefitting from their deep experience of financial services, global network and long term pool of capital,” he added.

CVC is making the acquisition through Strategic Opportunities Fund II, a vehicle that invests in businesses that are suited for longer-hold investments.

“As one of the largest global consolidators of non-life run-off insurance books, with a leading position in the UK and Lloyd’s market, embedded cash flows and a predictable financial profile, RiverStone Europe is ideally suited to CVC’s Strategic Opportunities platform, which specializes in backing established businesses in stable markets that have long term growth ambitions,” said Peter Rutland, managing partner and head of Financial Services at CVC.

The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close in early 2021.

Source: Fairfax Financial

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