Arch Capital Group Ltd. will acquire Watford Holdings Ltd. for about $ 622 million, Arch said in a statement on Friday.
Bermuda-based Watford will continue to operate as a stand-alone business after the completion of the deal, which is expected in the first quarter of 2021, the statement said.
Arch, which founded Watford as a reinsurer with a non-traditional investment strategy in 2014 before the latter was announced, owns approximately 13% of Watford's outstanding shares.
News of the potential deal surfaced last month following a decline in Watford's stock price.
The transaction will be financed through cash from Arch's balance sheet and is subject to customary closing terms, including regulatory and shareholder approval.
Arch, which is also based in Bermuda, will retain "the flexibility to bring in additional investment partners as co-investors in the transaction," the statement said.
Marc Grandisson, Arch's President and CEO, said "we are pleased to deepen our existing strategic and financial investments," at Watford.
Jon Levy, Watford's President and CEO, said he expects a "seamless transition for our customers, trading partners and policyholders." [1