Japan's Sompo agrees purchase of Bregal-owned insurer Canopius

According to a release, Sompo Japan - a unit of NKSJ Holdings - will acquire all shares in the company for GBP594 million ($972 million), representing 1.5x multiple based on Canopius's unaudited tangible net asset value at June 30, 2013. The acquisition will be sourced from existing funds.

Canopius is a privately-owned insurance and reinsurance group operating in the Lloyd's of London insurance market. The company operates in Europe, the United States, Singapore and Australia. It had gross written premiums of GBP692 million in 2012 and has 560 employees, according to the company website.

Bregal first invested in Canopius in 2003, eventually committing a total of total EUR52 million ($71.5 million) via Bregal Fund I. The firm then went on to commit a further EUR59 million though Fund II in 2008.

According to a release, Canopius will form the foundation of NKSJ's specialty insurance business. On completion of the deal, Canopius will be managed as a separate specialty insurer as part of Sompo Japan. Canopius will retain its brand and the incumbent management team will remain in place.

Sompo is the largest unit of NKSJ, Japan's third biggest property and casualty (P&C) insurer by market value. The deal - which is subject to regulatory approval and expected to close in the second quarter of 2014 - is NKSJ's largest acquisition to date.

Japanese insurance companies are increasingly looking to acquire overseas assets as revenues are hit by the country's ageing population and fierce domestic competition According to AVCJ Research, Sompo previously acquired a 93% in Turkish non-life insurance company Fiba Sigorta Anonim Sirketi for JPY28.1 billion in 2010.

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• Topics
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