Ambac Financial Group Inc. said Wednesday it has signed a definitive agreement to acquire a 60% stake in Beat Capital Partners Ltd., a London-based venture capital firm, for $282 million in a cash and stock deal.
Up to $40 million will be paid in shares of Ambac common stock and the remainder in cash, subject to closing adjustments. The deal is expected to close in the third quarter.
Beat’s businesses produced $533 million in combined gross premiums and approximately $17 million in EBITDA in 2023.
All of Beat’s 160 employees are expected to remain in their current roles post-transaction, and Beat will operate as part of Ambac’s Cirrata Group, an insurance distribution platform.
New York-based Ambac will purchase the 60% stake from existing shareholders including Bain Capital LP and Beat’s management team. Bain Capital has backed Beat since 2020.
Beat’s management team and Bain Capital each will retain an equity stake of around 20% in Beat. John Cavanagh, partner and chairman of Beat, will continue to manage the business as part of the senior Beat leadership team.
The deal “materially accelerates” Ambac toward its three-year target of generating in excess of $100 million of annual EBITDA, Claude LeBlanc, president and CEO of Ambac, said in a statement.
“This acquisition propels Ambac to the forefront of the specialty program insurance market,” Mr. LeBlanc said.
With the addition of Beat, Ambac’s specialty property and casualty insurance platform, which comprises Cirrata Group and Everspan Group, is projected to generate in excess of $1.4 billion in gross written premiums on a combined full-year 2024 pro forma basis.
Since it was formed in 2017, Beat has launched 13 underwriting franchises and managing general agents. It also has certain management rights for Lloyd’s of London Syndicates 4242 and 1416, and an exclusive capacity relationship with Cadenza Re Ltd., a Bermuda-based reinsurer.
