Randall & Quilter gets regulatory clearance for US acquisition

Randall & Quilter's US subsidiary has been given US regulatory clearance for the acquisition of Global US Holdings, the parent of Global Reinsurance Corporate of America, a New York-based reinsurance company in run-off.

The company said on Tuesday that the deal - which was agreed in September 2018 at price of $80.5m - is expected to close shortly.

Shore capital said the transaction is "a significant milestone" for Randall & Quilter and should be materially positive for profits in 2019.

"The fact that the approval process has taken several months is not unusual, but investors should be reassured that completion is now in sight," said analyst Paul de'Ath.

"The deal itself is the largest legacy transaction the business has been involved in and is likely to have a substantially positive impact on earnings. This announcement, along with the largest ever legacy reinsurance contract announced in 2018 shows the strength of the business model. Its ability to deliver for larger customers bodes well for future transactions of greater scale, in our view.

"R&Q has great opportunities for growth in both of its business lines. The pipeline of potential legacy transactions is very strong as more and more owners of insurance assets are concluding that R&Q would be a better owner of those assets. The programme management business has made an exceptional start in 2018 and we would expect the growth to continue into 2019F and beyond although the earnings on this business will take some time to come through."