DARAG Group, the Malta-based legacy acquisition company, announced it has agreed to sell its North American and Bermuda business entities to the RiverStone Group, a subsidiary of Fairfax Financial Holdings Ltd.

The sale, which is subject to regulatory approvals, is expected to close by year end. Financial details were not disclosed.

DARAG said this transaction simplifies its operations and allows the group to focus on its core European business, bringing additional capital “to execute its strong pipeline of European transactions, several of which are in advanced stages of negotiation.”

“We are pleased to pass this excellent and well-established niche business into the hands of a great company like RiverStone,” commented Tom Booth, CEO of DARAG.

Booth said the transaction provides the opportunity for DARAG to focus on its European core. “Our strong, well capitalized niche position, and good market conditions, give us great optimism for our European business,” he said.

DARAG and RiverStone Group said they are committed to ensuring there is no disruption to the business entities and their transaction pipeline.

“This acquisition perfectly fits our growth strategy, bolstering our capabilities and significantly boosting our market visibility in several North America insurance segments. We’re confident that this transaction will fuel innovation, inspire superior service, and create a powerful synergy that benefits our clients,” according to Bob Sampson, president of RiverStone, in a statement.

Another legacy acquisition specialist, R&Q Insurance Holdings Ltd., was put into liquidation in Bermuda in June after facing months of adverse loss development and other cash-flow issues, which had prompted the company to sell its property/casualty program management subsidiary, Accredited, to Onex Partners, the Canadian private equity company. That sale was successfully completed at the end of June.

DARAG was advised by PJT Partners and Nomura as lead financial advisers, RBC as financial adviser, and Proskauer Rose LLP as legal adviser. RiverStone’s legal advisers were Norton Rose Fulbright US LLP.

About DARAG

DARAG is a leading international insurance and reinsurance group specializing in the assumption of discontinued business and the provision of capital and operational relief solutions. The group has completed 67 runoff transactions in 21 countries with a value in excess of €1.7 billion ($1.9 billion).

Source: DARAG