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Sirius names PE backers as it tweaks Easterly deal

By Laura Sanicola 


Sirius International Insurance Group and Easterly Acquisition Group have detailed an expected private placement that will raise at least $213mn.

The deal partners announced the arrival of Gallatin Point Capital, Carlyle, Centerbridge and Bain Capital Credit on the Sirius investor roster as they pushed back the date on which an equity exchange ratio will be determined by three months.

In an amendment to a deal made public in June, the exchange rate will be established on 30 September instead of 30 June, the companies said. The transaction will result in Sirius common shares becoming publicly traded on the Nasdaq stock market in New York.

Under the agreement with Easterly, a publicly traded special-purpose entity, Easterly shareholders would end up owning 7 percent of the merged entity, which will take the Sirius name. Easterly investors will receive 1.05x Sirius’ diluted GAAP book value per share on 30 September in exchange for their Easterly stock, the companies said.

In the private placement, Gallatin, Carlyle, Centerbridge Partners and Bain Capital Credit will buy $213mn of Sirius’ Series B preferred and common shares under a subscription agreement, which could be cut to $111mn at Sirius’ option.

Also, the investors will receive warrants with a strike price equal to 125 percent of the merger price that are good for five years following the issue date. CEO Allan Walters had told this publication in July that it expects to raise more than $200mn through a so-called private investment in public equity, or PIPE, deal.


Sirius will use proceeds from the private placement, which is subject to the merger’s closing, to redeem all outstanding Series A preferred stock and for general corporate purposes. Sirius agreed in June to combine with Easterly Acquisition to gain a listing on Nasdaq in a deal that would give the insurer, owned by China Minsheng Investment Group, a pro-forma market value of $2.2bn. China Minsheng acquired the carrier from White Mountains for $2.6bn in September 2017.


The reverse merger with Easterly trounced early plans for Sirius to list in London in the second half of this year, and prompted the cancellation of its earlier deal to buy a majority stake in Israeli insurer Phoenix for about 2.3bn shekels ($653mn).


Easterly is a special-purpose acquisition vehicle that raised $200mn in an August 2015 IPO. The New York-based “blank cheque” company is an affiliate of asset management holding company Easterly LLC. As of yesterday’s closing, Easterly Acquisition had a market value of about $207.3mn at a share price of $10.35, and around 20 million shares outstanding. It ended trading on 30 June at $10.30.


The merger is expected to close at the end of this year’s third or the beginning of the fourth quarter, assuming certain conditions are fulfilled.


Sirius’ advisers include law firm Sidley Austin. Easterly’s law firm is Hogan Lovells US.

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