On August 30, 2018, Sirius International Insurance Group, Ltd. (“Sirius Group”), a global multi-line insurance and reinsurance group, and Easterly Acquisition Corp. (“Easterly”) (Nasdaq: EACQ) announced that they have executed an amendment to the agreement and plan of merger (the “Merger Agreement”) for the previously announced business combination of Sirius Group with Easterly, pursuant to which Easterly will merge with and become a wholly-owned subsidiary of Sirius Group (the “Merger”) and Sirius Group will become a publicly listed company.
The amendment, among other things, modifies the date on which the exchange ratio, used to calculate the number of Sirius Group common shares to be issued in the Merger, is determined. Pursuant to the terms of the Merger Agreement, as amended, Easterly’s common stock will be exchanged for Sirius Group’s common shares at a value equal to 1.05x Sirius Group’s diluted GAAP book value per share as of September 30, 2018 (the “Merger Price”), instead of as of June 30, 2018.
Sirius Group has also entered into subscription agreements with affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, L.P. and Bain Capital Credit (the “investors”) pursuant to which the investors have committed to purchase $213 million of Series B preference shares and common shares in a private placement, which amount may be decreased to $111 million at Sirius Group’s option. In addition, the investors will receive warrants that are exercisable for a period of five years after the issue date at a strike price equal to 125% of the Merger Price.
The closing of the private placement is subject to the closing of the Merger, as well as other customary conditions. Proceeds from the private placement will be used by Sirius Group to redeem all outstanding Series A preference shares, and the remainder for general corporate purposes.
The Merger has been unanimously approved by the boards of directors of Sirius Group and Easterly and is expected to close at the end of the third or beginning of the fourth quarter of 2018. Completion of the Merger is subject to the satisfaction of certain conditions including, but not limited to, approval of the transaction by Easterly’s stockholders, but is not subject to any insurance regulatory approvals or a minimum cash condition.