Ann: Acquisition of St Andrew's Insurance and Trading Update, page-9

Hi Lithium,

Nice pick-up there. I can't see any details around the % of profit share in the announcement either, although I'm purely guessing that it could possibly be relative to the funding share between the reinsurer and FIG.

Which reminds me that I made a mistake in my earlier post by taking in 100% of the St Andrews EBITDA estimate; correcting that and as a result bumping the P/E up to 5x and assuming flat growth, still miles away from the industry peers comparison of around 18x. Which backs up the management comment in the preso that St Andrews will contribute moderately to profit in year 1 and expected to grow from there.

Personally I thought the deal was a tad on the rich side, but I guess when opportunity came knocking especially in a stagnant market segment one would need to jump on it, and also take in consideration that FIG doesn't really have a great deal of bargaining power as a relatively small fish in a big pond.

I should also point out that this "leading global reinsurer" is likely to be someone other than Swiss Re, so FIG is now opening up the "supplier" base and de-risking that single dependency for the business.

FIG is starting to look more and more like a mini SDF.