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Enstar to Acquire U.S., Canadian Closed-Life Operations from HSBC

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Bermuda-based Enstar Group Limited (Nasdaq:ESGR), a company that manages and acquires insurance and reinsurance companies in run-off as well as their portfolios, has entered into an agreement where it will acquire all of the shares of Household Life Insurance Company of Delaware and HSBC Insurance Company of Delaware.

Both Household Life Insurance Company and HSBC Insurance Company of Delaware have written U.S. and Canadian life insurance, credit insurance, term life insurance, assumed reinsurance, corporate owned life insurance and annuities. 

The shares will be purchased through a combination of cash on hand as well as drawings from Enstar’s revolving credit facility and will be purchased from Household Insurance Group Golding Company, an affiliate of HSBC Holdings plc.

The base purchase price of $181 million will roll forward under the terms of the stock purchase agreement that will be based on fluctuations to the capital and surplus of the entities being acquired.

The acquisition is subject to regulatory approvals as well as the execution of various customary closing conditions and is expected to close at the end of 2013.