R&Q to sell program management business, Accredited, to Onex for $465m

R&Q Insurance Holdings Ltd, on 4th April 2023, unveiled its strategy to separate its legacy insurance entity and its program management arm, Accredited. Subsequent to this decision, R&Q confirms entering into a conditional pact with Onex Corporation for the sale of Accredited‘s holding company, Randall & Quilter America Holding Inc. The deal’s completion rests upon R&Q shareholder and regulatory approvals.

Sale Highlights

• The proposed sale marks an enterprise value of $465 million, with an expected equity worth around $438 million.
• The Sale should yield about $300 million in net cash proceeds, out of which approximately $170 to $210 million will be readily available. This available cash is set to significantly reduce R&Q’s debt levels.
• Critical to the Sale’s conclusion is the transfer of R&Q’s top executives, CEO William Spiegel and CFO Thomas Solomon, to Accredited.

Board Recommendations and Background

Earlier in April, the board deliberated on Accredited’s full separation and subsequently scoured the market for a fitting partner, culminating in this Sale to Onex. The Non-Executive Directors wholly endorse this transaction, emphasizing its value for all R&Q stakeholders and Accredited’s continued independent rating potential.

The board accentuates the Sale’s importance, noting that a failure to uphold Accredited’s ‘A-‘ rating could severely hamper its operational success, especially in the US. Additionally, R&Q’s existing financial leverage is deemed untenable, and without the Sale, R&Q’s continued operations might be at risk.

Closing Conditions and Future Strategy

This sale is pivotal to R&Q’s direction, refocusing it as a legacy insurance establishment across multiple regions. The post-sale scenario paints R&Q with a seasoned platform, boasting over 150 experts and over $1.1 billion in Reserves Under Management.

Leadership Transitions and Comments

Post-sale, Group Non-Executive Chairman Jeff Hayman will assume the roles of Chairman and Interim CEO of R&Q, with a hunt for a new CEO commencing shortly after. Paul Bradbrook is slated to become the CFO post-closure.

Jeff Hayman lauds the sale, deeming it beneficial for R&Q’s stakeholders and highlighting R&Q’s legacy in the market. Adam Cobourn of Onex Partners expresses his excitement about ushering Accredited into its next growth phase with Onex’s backing.