Catlin has today released further details on the progress of its acquisition and integration of Wellington.
Catlin Insurance Company (Catlin Bermuda) has priced an issue of $600m noncumulative perpetual preferred shares at a dividend rate of 7.249%. The transaction size was increased during the bookbuilding process from $300m to $600m as a result of strong investor demand. Proceeds will be used to refinance the $500m short-term acquisition financing facility Catlin established to help finance the acquisition.
Chief executive Stephen Catlin said that he was delighted by the response from investors and highlighted the fact that that this was “the largest-ever preferred share issuance by a member of our peer group, both in the UK and the Bermuda markets.”
At the time Catlin made its offer to the Wellington board, Catlin contemplated the consequences of a substantial loss of business that had been underwritten by Wellington. Commenting on the January renewals, Catlin said: “We have been very encouraged during our important January 1st renewal season by our ability to retain quality business.”
The integration of Catlin and Wellington operations is reported to be proceeding ahead of management's original plan, with underwriting operations having been fully integrated and the combined London underwriting staff occuping a new, purpose built underwriting floor located in Catlin's office.
There have been fewer than ten unplanned departures out of a total of more than 900 employees since the acquisition. However, Catlin added that as part of the integration, a number of redundancies were made upon the offer being declared unconditional.
Catlin added: “I am amazed at how far our integration efforts have progressed in such a short time frame. Within four months of Catlin's initial offer to the Wellington Board, Catlin will have completed the acquisition, fully integrated the companies' operations, refinanced the acquisition-related debt and relocated all employees in London under one roof. The departure of a small number of employees from the company is well within expectations and will have no material impact on our business going forward.”
