Arch Capital Group acquires Watford Holdings

Arch Capital Group has acquired Watford Holdings in an all-cash transaction valued at $622m (£477m).

Watford will continue to operate as a standalone business and remain consolidated within Arch’s financials, after closing in Q1 of 2021.

As part of the acquisition agreement, Watford shareholders will receive $31.10 (£23.88) in cash for each Watford common share they hold.

Independent members of Watford’s board of directors “overwhelmingly approved” the agreement and recommended shareholders vote in favour of the transaction.

Jon Levy, Watford’s president and chief executive officer, said: ‘‘This represents a clear path forward for Watford, while also delivering an attractive premium to shareholders in a transaction with a high degree of certainty to close.’’

‘‘We believe that Watford will be better positioned as a standalone business within Arch to execute its strategic priorities and growth plans. Importantly, we expect a seamless transition for our clients, trading partners and policyholders, who we think will benefit from Watford becoming part of a larger organization with greater resources.’’

Marc Grandisson, Arch’s president and chief executive officer, said: ‘‘Since we launched Watford in 2014, the company has been a valued part of the Arch story and we are pleased to deepen our existing strategic and financial investment.’’

‘‘Our longstanding contractual partnership with and financial consolidation of Watford expedited the due diligence process and should give all stakeholders confidence in our ability to close this transaction quickly.’’

He added: ‘‘Watford’s policyholders and trading partners will benefit from the continued underwriting strength and service they have come to expect from Watford and Arch.’’

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