Helios Underwriting PLC (LON:HUW) has acquired Lloyd's of London member Catbang 926 for £5.6mln in cash.
Helios said £2mln would be paid on completion and the balance paid within 60 days of completion.
The acquisition is in line with the company’s strategy of buying in underwriting capacity.
The 2019 underwriting capacity of Catbang is £4.1mln, Helios revealed. Catbang participates in a spread of Lloyd's syndicates that broadly matches the existing portfolio of Helios and this transaction enables Helios to continue to build its participations on the better syndicates at Lloyd's, the company added.
The consideration represents a discount of about 16% to an independent valuation of £6.7mln placed on Catbang and is roughly £0.6mln below the fair value of assets being acquired.
Helios will reinsure 70% of Catbang’s 2020 underwriting year in line with its stated policy of reducing 'on-risk' exposures.
In 2018, Catbang made a profit before tax of around £200,000 on gross premiums written of £3.6mln. Its syndicate capacity with an estimated market value of £1.3mln has been included in the transaction, Helios said.