Run-Off Firm Catalina Raises $700M, Forms Shareholder Restructure with Apollo, RenRe

Catalina Holdings (Bermuda) Ltd., a legacy runoff property and casualty re/insurance specialist, announced it has completed a US$700 million equity capital raise and concluded its shareholder restructuring after receiving regulatory approvals.

As a result of this transaction, Apollo Global Management has become the majority shareholder of Catalina, while RenaissanceRe Holdings Ltd. has become a minority shareholder alongside Catalina’s management.

As part of the shareholder restructuring, Apollo Global Management’s affiliates, called Apollo Funds, have committed an additional US$700 million in new equity capital to fund Catalina’s continued growth, which brings Catalina’s total committed and undrawn equity to US$850 million, said Catalina in a statement.

The conclusion of the shareholder restructuring follows the announcement in October 2017 that the Apollo Funds had signed a definitive agreement to acquire a majority shareholding in Catalina. Apollo’s acquisition vehicle includes a number of blue-chip, long term institutional and strategic investors.

“We are pleased to announce that the transaction has closed, and delighted to have secured additional equity commitments of US$700 million, which together with our existing committed and undrawn equity, prior commitments from RenaissanceRe, and our own strong cash-flow generation, gives us equity firepower of over US$1 billion,” said Chris Fagan, chairman and chief executive of Catalina.

“When that is combined with our relationship with Apollo’s other entities, it gives Catalina very substantial financial resources to originate much larger transactions than have been done in the non-life legacy sector to date,” he added.

“We believe the completion of this sizable equity financing, and the Apollo Funds becoming majority shareholders, are a significant milestone for Catalina. This transaction consolidates the company’s position as a leader in the non-life run-off industry,” said Gernot Lohr, senior partner at Apollo.

Catalina’s relationship with Apollo dates back to December 2013 when funds managed by affiliates of Apollo made an initial investment in the company. Since then, Catalina has grown significantly, having completed 16 transactions acquiring US$3.8 billion of non-life insurance and reinsurance liabilities, and as of Aug. 31, 2018 had total assets of US$4 billion.

Source: Catalina Holdings

Related:

• Private Equity Firm Apollo to Buy Aspen Insurance for $2.6 Billion
• RenaissanceRe to Buy Minority Stake in Run-Off Firm Catalina Holdings