Catalina Holdings, a Bermuda-based financial services group, has reached a definitive agreement to acquire Sparta Insurance Holdings, as part of its ongoing expansion strategy.
Financial terms of the transaction have not been revealed by either party.
Upon completion of the takeover, Catalina plans to place some of Sparta’s business into run off and to relocate Sparta’s alternative market business to Arch Insurance Company under a separate renewal rights agreement.
Sparta, which mainly concentrates on specialty program and risk transfer alternatives in the US, had total assets of $911m, gross reserves of $495m, net reserves of $309m and shareholder equity of $201m.
The acquisition will be funded by Catalina using cash at hand and a senior debt facility. Catalina’s total assets on pro forma basis for this acquisition will be in more than $2.9bn.
If the proposed transaction materializes during the third quarter of 2014, which is pending receipt of regulatory approvals, it will be Catalina’s twelfth takeover since the business was formed in 2005.
Commenting on the transaction, Catalina chairman and chief executive Chris Fagan said, "The acquisition of Sparta adds significantly to our operations in the North East of the US, and follows quickly after our recent acquisition of Alea North America.
"Catalina will be gaining talented people with this transaction who will be able to help with our operations across the US."
Mayer Brown served as legal advisers to Catalina in this transaction, while JPMorgan Securities provided financial advice and Willkie Farr & Gallagher offered legal advice to Sparta in this transaction.
Image: Catalina agrees to purchase Sparta Insurance. Photo: courtesy oPhoto: courtesy of stockimages.