Randall & Quilter to acquire RSL businesses

Sep 14, 2010 (Datamonitor via COMTEX) -- Randall & Quilter Investment Holdings has announced that, subject to regulatory approval, the group has agreed to acquire Reinsurance Solutions, Reinsurance Solutions LLC, their employees and various other assets and liabilities, collectively the RSL businesses, from Guy Carpenter & Company and Marsh.

The total agreed consideration is $10 million, payable in cash upon completion of the transaction. The RSL businesses will be acquired on a debt free basis with estimated working capital of $2.75 million.

Following the acquisition, Randall & Quilter (R&Q) intends to restructure the RSL businesses, the costs of which will be taken in the current financial year. Given that the likely completion date of the transaction is anticipated to be during the latter part of 2010, the restructuring costs and related due diligence costs are expected to result in a small loss from the RSL businesses during 2010.

This does not, however, affect the group's overall guidance for the full year result provided in the interims result statement on August 18, 2010. Furthermore, a full contribution from the RSL businesses is expected from 2011, when the acquisition is anticipated to be accretive to earnings per share.

In addition, the group has agreed to acquire Excess & Treaty Management (ETMC) and certain related employees from Guy Carpenter & Company. ETMC will be acquired for a consideration of $1 on a debt free basis and at completion is expected to have $9.5 million in funding, related to the business's expected future Excess Casualty Reinsurance Association servicing costs.

Following the acquisition, the group has also agreed to provide run-off management services using ETMC's employees to the Carpenter Management in respect of its US-based managed run-off pool.

Ken Randall, chairman and CEO of R&Q, said: "We are delighted to have reached agreement with Guy Carpenter to purchase the RSL businesses and ETMC. In addition to generating additional sustainable profits for the group's insurance services division, the RSL businesses will increase the group's client base and depth of expertise and should generate other cross-selling opportunities."

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