Apollo acquires Aspen in $2.6bn deal

November 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

November 2018 Issue

Building on its existing high-quality specialty insurance and reinsurance business, leading global alternative investment manager Apollo Global Management, LLC, together with affiliates of certain investment funds (Apollo Funds), has entered into a definitive agreement to acquire Aspen Insurance Holdings Limited.

Under the terms of the agreement, an all-cash transaction which has been approved by Aspen’s board of directors, the Apollo Funds will acquire all of the outstanding shares of Aspen for $42.75 per share in cash, representing an equity value of approximately $2.6bn.

“This transaction is a testament to the strength of Aspen’s franchise, the quality of our business and the talent and expertise of our people,” said Chris O’Kane, Aspen’s group chief executive. “Under the ownership of the Apollo Funds, Aspen will have additional scale and access to Apollo’s investment and strategic guidance, which will help us to accelerate our strategy and take Aspen to the next level.”

Through wholly-owned subsidiaries and offices in Australia, Bermuda, Canada, Ireland, Singapore, Switzerland, the United Arab Emirates, the UK and the US, Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets. For the year ended 31 December, the firm reported $12.9bn in total assets, $6.7bn in gross reserves, $2.9bn in total shareholders’ equity and $3.4bn in gross written premiums.

Consummation of the Apollo/Aspen transaction is not subject to any financing contingencies. Upon completion, Aspen will be a privately held portfolio company of the Apollo Funds and Aspen’s ordinary shares will no longer be listed on the New York Stock Exchange.

“We are tremendously excited for the Apollo Funds to acquire Aspen,” said Alex Humphreys, a partner at Apollo. “We believe that Aspen benefits from strong underwriting talent, specialised expertise and longstanding client relationships which makes them well positioned in the market. We look forward to working with Aspen to build on the existing high quality specialty insurance and reinsurance business and we aim to leverage Apollo’s resources and deep expertise in financial services to support the company as it embarks on its next chapter.”

A leading global alternative investment manager with offices in New York, Los Angeles, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai, as of 30 June 2018, Apollo had assets under management of approximately $270bn in private equity, credit and real assets funds invested across a core group of nine industries.

“We are delighted to have reached this agreement with the Apollo Funds,” said Glyn Jones, chairman of Aspen’s board of directors. “This transaction, which is the outcome of a thorough strategic review by Aspen’s board of directors, provides shareholders with immediate value and will allow Aspen to work with an investor that has substantial expertise and a successful track record in the reinsurance industry.”

Willis Towers Watson and Libero Ventures advised Apollo on the transaction, with Sidley Austin LLP having served as legal counsel. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as financial advisers to Aspen and Willkie Farr & Gallagher LLP served as its legal counsel.

The Apollo/Aspen transaction is expected to close in the first half of 2019, subject to approval of regulators and Aspen’s shareholders and the satisfaction of other closing conditions.

Mr O’Kane concluded: “We are excited about the future as we embark on a new chapter in Aspen’s history with a partner that understands our strengths, culture and customer-centric philosophy.”

Fraser Tennant