James River completes JRG Re sale to Fleming

James River completes JRG Re sale to Fleming | Insurance Business Asia

Reinsurance

James River completes JRG Re sale to Fleming

Transaction closed at previously agreed upon terms

Reinsurance

By
Kenneth Araullo

Following a short back-and-forth between buyer and seller, James River Group has announced the completion of the sale of its subsidiary, JRG Reinsurance Company (JRG Re), to Fleming Intermediate Holdings for the previously agreed upon terms of $277 million.

The transaction was finalized as per the Stock Purchase Agreement executed on November 8, 2023.

James River CEO Frank D’Orazio released a statement highlighting the deal’s closure and its plans in moving forward.

“We are pleased to have successfully completed our sale of JRG Re to Fleming in accordance with the Stock Purchase Agreement that the parties negotiated together and executed on November 8, 2023. James River will continue to focus its resources on its core US insurance businesses where we have meaningful scale, including our E&S and fronting businesses,” he said.

The completion follows a legal dispute in which James River secured a preliminary injunction from the New York County Supreme Court, Commercial Division. The court then mandated Fleming, a portfolio company of Altamont Capital Partners, to proceed with the acquisition by no later than April 16, 2024.

Fleming contested the injunction earlier this month, arguing the dispute arose from what it claimed were deceptive practices by James River post-agreement, not from a change of heart about the acquisition.

“This is not a case of buyer’s remorse. It is a bait and switch,” Fleming stated in its legal filings.

The company also expressed its continued willingness to purchase JRG Re, contingent on James River addressing certain alleged contractual breaches related to reserves and liquidity. It is unclear how Fleming reached its current agreement with James River over the JRG Re sale.

The transaction has been the source of trouble for the James River parent company, which has faced downgrades in its ratings. The company also noted a net loss realized in its Q4 2023 financial results, which revealed a notable $80.4 million loss related to the sale.

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