News Alert: Easterly Acquisition Corp Announces Combination with Sirius International Insurance Group

Easterly and Sirius to Combine in an All Stock Transaction for a Pro Forma Market Cap of $2.2 Billion

Easterly Acquisition Corp, a SPAC focused on the financial services sector, announced this morning it has entered into a definitive agreement and plan of merger with Sirius International Insurance Group, Ltd.,  a global multi-line insurance and reinsurance group.  The all-stock transaction is expected to produce a pro forma equity value of $2.2 billion for the combined company.

Sirius Group provides multi-line insurance and reinsurance in over 140 countries with gross written premiums of $1.4 billion in 2017.

Easterly originally IPO’d back for $200 million back in July of 2015, so we’re coming up on three years now that it has been trying close on a combination.  However, Easterly has still managed to hang on to $155 million cash in trust. No easy feat.  Read below for the transaction details.

TRANSACTION DETAILS

CONSIDERATION

• Easterly’s common stock to be exchanged for Sirius Group’s common shares at a price of 1.05x Sirius Group’s pro forma diluted GAAP book value per share as of June 30, 2018.
• Current Easterly stockholders will own approximately 7% of the combined company immediately following the Merger
• Sirius also intends to execute a PIPE, but no details on size as of yet.

FOUNDERS SHARES

• The Easterly Sponsors will surrender for cancellation (and for no consideration) between 3,328,000 and 4,528,000 of Easterly’s Founders Shares.  As a reminder, the Sponsors currently hold a total of 5,000,000 Founders Shares.
  • The final amount to be surrendered for cancellation will be determined based on the amount of cash in the Trust Account post-redemptions and the amount raised in the PIPE of Sirius Common Shares.

SPONSOR PRIVATE PLACEMENT WARRANTS

• The Easterly Sponsors will also be surrendering for cancellation (and for no consideration) ALL 6,750,000 Private Placement Warrants that were purchased for $1.00 at the time of the IPO.

REDEMPTION PRICE

• Assuming that Easterly’s stockholders approve the extension period at the shareholder vote on June 28th, Sirius Group has agreed to lend to Easterly $0.03 per month through the extension period for each public share that is not redeemed.
• Easterly’s current pro rata per share of the Trust is estimated to be $10.31
  • If the transaction does not close until November, this means the pro rata trust value could potentially be $10.46 at the time of the shareholder vote.
• The loan will be forgiven if the Merger does not close by November 30, 2018.

ADVISORS

• Sirius Group is being represented by Sidley Austin LLP
• Easterly is being represented by Hogan Lovells US LLP