James River Announces Agreement to Sell Casualty Re Business to Fleming

Transaction Overview

James River Group Holdings, Ltd. (“James River”) has entered into a definitive agreement to sell JRG Reinsurance Company, Ltd. (“JRG Re”), its third-party casualty reinsurance business, to Fleming Intermediate Holdings (“Fleming”)

  • Total estimated transaction value of $277mm, inclusive of a $139mm pre closing dividend and a $138mm cash payment from Fleming at close
  • Under the terms of the transaction, valued as of September 30, 2023, James River would receive 0.75x the book value of JRG Re at closing
  • The transaction is subject to customary closing conditions including receipt of required regulatory approvals; it is expected to close in Q1 2024

The transaction includes the full insurance entity supporting James River’s Casualty Reinsurance segment, including the remaining assets and liabilities, as well as the staff supporting the business

  • The segment produced $85.2mm of gross written premium in 2022

James River (NASDAQ: JRVR) is a Bermuda-based insurance holding company that owns & operates specialty insurance & reinsurance companies

  • James River wrote $1.5bn of gross written premium in 2022, and had shareholders’ equity of $563mm as of September 30, 2023
  • The transaction aligns with James River’s strategy to focus on core businesses where it has meaningful scale, including its E&S and fronting businesses

Fleming provides a full range of reinsurance structures and finality solutions for legacy liabilities, as well as liquidity and risk transfer alternatives

  • Founded in 2016, Fleming’s focus is to help midmarket insurers use their capital more efficiently and productively
  • In May 2022, Fleming received a $150mm investment from Altamont Capital Partners (“Altamont”)

Altamont is an established and leading investment franchise across the specialty finance, insurance, asset management, and banking sectors

  • Currently manages over $4bn of AUM and is an experienced insurance investor; select investments include Accelerant, Hardon, Embark, and Kuvare

Howden Tiger Capital Markets & Advisory Role

HTCMA is acting as Financial Advisor to James River; key roles and responsibilities include:

  • Assistance in preparing JRG Re’s financial projections and valuation analysis
  • Created marketing materials and financial packages shared with potential buyers
  • Advised on negotiating key transaction terms and conditions including ultimate deal structure
  • Assistance in assessing regulatory and rating agency communication and implications
  • Managed an organized and efficient due diligence process
  • Provided objective advice and acted as a confidant to James River throughout the process