KKR’s first European IPO

Kohlberg Craves Roberts has achieved its first floatation on a European exchange with the listing of Bermuda-based reinsurance group, Alee. The IPO on the London market raised £165m with Goldman Sachs and Merrill Lynch acting as joint bookrunners. The issue price was 250p, giving the company an enterprise value of £433m.

KKR first invested in the company in December 1997, when it acquired 100% of Swiss insurance group Rhine Re’s share capital with the idea of creating a new global reinsurer. The company expanded internationally and made a series of acquisitions. In the US Rhine Re bought the insurance business of Bankers Trust Corporation in 1998, the assets and underwriting business of Equus Re in October 1999 and Seven Hills Insurance Company in 2001.

The group received $150m additional capital from KKR in 2000, when it acquired the Imperial Fire and Marine Re-Insurance Company. This was also used to strengthen the group’s balance sheet. In 2001 the European operations of the group changed their name to Alea Europe and KKR agreed to invest a further $150m at the end of the year.

The offering, which was four times oversubscribed, represents 38.2% of Alea’s issued share capital. KKR’s 60% stake in the company will be diluted to 39.4%, the investor is subject to a six-month lock-in before it can sell its shares. Alea offers all forms of property and casualty reinsurance, insurance, alternative risk and finite risk products. Gross premiums written by the company last year totalled $931.6m. The company has around 375 employees based in North America, the UK, Bermuda and Switzerland.