DGAP-News: Enstar Group Limited Announces Investment by GS Capital Partners

Enstar Group Limited

21.04.2011 00:08
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HAMILTON, Bermuda, 2011-04-21 00:07 CEST (GLOBE NEWSWIRE) —
Enstar Group Limited (–Enstar–) (Nasdaq:ESGR) today announced that it has
entered into a definitive agreement pursuant to which, subject to receipt of
applicable regulatory approvals, affiliated funds of GS Capital Partners
(–GSCP–), private equity funds managed by Goldman Sachs&Co., will invest up
to $291.6 million for up to a 19.9% fully diluted economic interest in Enstar
at a price of $86.00 per share. GSCP will also receive warrants to acquire an
additional 2% fully diluted interest in Enstar at an exercise price of $115.00
per share. The investment will be completed in three tranches as described
below. A shareholder vote will be required for the consummation of the third
tranche, representing $98.7 million of the total investment. Certain current
shareholders of Enstar have entered into voting agreements (the –Voting
Agreements–) with respect to shares representing 34.35% of the Company–s
outstanding voting power under which they have committed to vote all of these
shares in favor of the transaction.

Dominic Silvester, Chief Executive Officer of Enstar, said, –We see tremendous
opportunity in front of us to build on Enstar–s unique skills and capabilities
in the insurance and reinsurance run-off market. This capital raise with
Goldman Sachs gives Enstar greater financial flexibility to pursue acquisitions
of companies and portfolios of business in run-off for the benefit of all
Enstar shareholders. We thank Goldman Sachs for their support of Enstar and
look forward to a long and productive relationship with them.–

In the initial closing held today, GSCP invested $110.2 million to acquire
531,345 voting ordinary shares of Enstar (–Voting Common Shares–) and 749,869
newly created Series A convertible non-voting preference shares of Enstar (the
–Non-Voting Preferred Shares–). The Non-Voting Preferred Shares bear no coupon
and are economically equivalent to the ordinary shares of Enstar in all
material respects. In connection with the initial closing, GSCP also received
warrants to acquire 340,820 Non-Voting Preferred Shares. Upon the receipt of
shareholder approval of certain matters related to the transaction, the
warrants will automatically convert into the right to purchase a newly-created
class of non-voting ordinary shares (the –Non-Voting Common Shares–) in lieu of
Non-Voting Preferred Shares, at the same exercise price of $115.00 per share.

Upon the receipt of certain regulatory approvals (but not before December 23,
2011), GSCP will invest an additional $82.7 million to acquire 134,184 Voting
Common Shares and 827,504 non-voting shares at a second closing. Subject to the
receipt of shareholder approval of certain matters related to the transaction,
GSCP will acquire an additional 1,148,264 non-voting shares at a third closing
for an additional $98.7 million investment. If such shareholder approval is not
received, the third closing will not take place.

Sumit Rajpal, Managing Director who leads financial services investing for
GSCP, said, –GS Capital Partners has a long history of investing in
market-leading financial services franchises. We view Enstar as a leading
player in the insurance and reinsurance run-off market and believe that our
capital will help Enstar grow considerably over time.–

In connection with the initial closing held today, Enstar appointed Sumit
Rajpal of GSCP to Enstar–s Board of Directors, effective May 16, 2011.

Enstar was advised in the transaction by Dowling&Partners Securities, LLC and
Keefe, Bruyette&Woods. Goldman Sachs&Co. acted as financial advisor to
GSCP.

Enstar, a Bermuda company, acquires and manages insurance and reinsurance
companies in run-off and portfolios of insurance and reinsurance business in
run-off, and provides management, consultancy and other services to the
insurance and reinsurance industry.

The Enstar Group Limited logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5734

This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements include statements regarding the intent, belief or current
expectations of Enstar and its management team. Prospective investors are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those projected in the forward-looking statements as a
result of various factors. In particular, there can be no assurance that Enstar
or GSCP will be successful in obtaining the regulatory approvals required to
consummate the second and third closings described above. Similarly, if
Enstar–s shareholders do not approve certain matters related to the
transaction, the third closing will not occur. Important risk factors regarding
Enstar may be found under the heading –Risk Factors– in Enstar–s Form 10-K for
the year ended December 31, 2010, and are incorporated herein by reference.
Furthermore, Enstar undertakes no obligation to update any written or oral
forward-looking statements or publicly announce any updates or revisions to any
of the forward-looking statements contained herein, to reflect any change in
its expectations with regard thereto or any change in events, conditions,
circumstances or assumptions underlying such statements, except as required by
law.

CONTACT: Richard J. Harris
(441) 292-3645
News Source: NASDAQ OMX

21.04.2011 Dissemination of a Corporate News, transmitted by DGAP –
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Enstar Group Limited

Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG3075P1014
WKN:

End of Announcement DGAP News-Service

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