R&Q Acquires 35% Interest in New York-Based Tradesman Program Managers

Randall & Quilter Investment Holdings Ltd. (R&Q) has reached an agreement to merge its wholly owned subsidiary, Sandell Re Ltd., with Tradesman Program Managers LLC in return for a 35% interest in the combined entity. The transaction is subject to the approval of the Bermuda Monetary Authority.

The initial book value of R&Q’s interest in the combined business will be $43.4m, which is equal to the estimated book value of Sandell at completion. Proforma pre-tax earnings of the combined business for the full year 2020 are estimated to be $17.2m.

Ken Randall and Stewart Ritchie will be joining the board of the newly combined business as representatives of R&Q.

Tradesman is a New York-based managing general agent that underwrites construction-related liability insurance known as the ARTISAN Contractors’ General Liability insurance program through insurance policies which are issued by Accredited Surety & Casualty Company Inc., R&Q’s A-9 rated subsidiary. It is currently owned by Daniel Hickey Jr., the CEO of Tradesman Program Managers and various affiliated entities and individuals.

Last year, Tradesman generated earnings before interest, tax depreciation and amortisation of $8.06m, an increase of 99% from 2018.

Sandell was acquired by the group in October 2019 for $25m and has been one of the reinsurers of the ARTISAN Contractors’ General Liability program since it incepted in 2017. As of December 31, 2019, Sandell Re had total assets of $116.7m and incurred a loss for the year of $1.3m after making a $3m provision against third party loans and strengthening reserves on acquired legacy portfolios by $2.6m.

Following the completion of the transaction, the group will deconsolidate Sandell and reflect its 35% equity interest in the enlarged Tradesman Group on its balance sheet.

Source: Randall & Quilter Investment Holdings Ltd.

Topics Mergers & Acquisitions New York