Bermuda domiciled hedge fund style reinsurance and hybrid investment platform Till Capital Ltd., has now signed a definitive agreement to acquire Toronto-based insurance provider Omega Insurance Holdings, Inc.
It’s the latest step in the growth and diversification of the Till Capital platform, which has been set up and structured using a Bermuda Class 3A reinsurer, named Resource Re, in order to produce underwriting profits and to outperform on the asset management side of the business as well.
In signing the agreement Till Capital has acquired Omega and subsidiaries Omega General Insurance Company and Focus Group, Inc. as the firm had previously announced in July. It provides Till Capital with a new source of insurance premium float, that can be put to work in its diversified, hybrid, natural resource and renewable focused investment strategy on the back-end.
The acquisition of Omega increases Till Capital’s insurance and reinsurance capacity as well as its assets under management, with Omega reported to have over $40m in assets currently. Till Capital expects the combination of Omega’s insurance expertise and it’s investment and technical teams will provide a solid foundation for growth.
Till Capital will pay an aggregate purchase price of 1.2 times book value, or approximately $15,400,000 as at June 30th, 2014, plus an amount not to exceed $3m for any transactions in process at closing, in exchange for all of the issued and outstanding shares of Omega.
Omega provides run-off solutions for Canadian insurance and reinsurance businesses exiting the local market as well as customised insurance and fronting arrangements for those wanting to access the Canadian market, as well as other solutions.
The assets from the Omega run-off lines will have been particularly attractive to Till Capital, as they may provide more duration to the investment side of its business. As Till Capital continues to build out a diversified holding company, primarily engaged in reinsurance, supported by its investments in royalties and equity holdings in the resource sector, acquisitions such as this could provide significant accretive value.