Proposed Sale of Accredited to Onex for $465 million

R&Q Insurance Holdings Ltd (“R&Q”) has announced the proposed Sale^(a) of its Program Management business, Accredited, to funds advised by Onex Corporation

The Sale is a result of a process with an extensive global outreach to a broad range of potential financial and strategic partners which commenced in April 2023

A Special General Meeting of R&Q shareholders is expected to take place by the end of the year, where a resolution is required to approve the Sale

• Closing of the Sale is expected to occur in late Q1 2024 or early Q2 2024

Terms of the Sale:

• R&Q will sell 100% of its equity interest in Randall & Quilter America Holdings Inc., the holding company of Accredited
• Accredited is valued at an enterprise value of $465m, representing an expected equity value of $438m
• Cash proceeds from the transaction are expected to be $300m, with between ~$170m – $210m available immediately upon closing (“Available Net Cash Proceeds”)
  • The Board intends to use all of the Available Net Cash Proceeds to facilitate a material de-leveraging of R&Q
• Sale is conditional on the transfer of William Spiegel and Thomas Solomon to Accredited upon closing
  • Upon closing of the Sale, Group Non-Executive Chairman Jeff Hayman will act as Chairman and Interim CEO of R&Q and Paul Bradbrook, currently Chief Accounting Officer of R&Q, will become CFO

The Sale refocuses R&Q as a legacy insurance business with over $1.1bn Reserves Under Management and over 150 people across multiple locations

The Sale will enhance R&Q’s ability to execute the existing strategy of transitioning to a capital efficient and stable recurring fee-based business model

• Gibson Re, R&Q’s dedicated sidecar will continue to be a core component of this transition

In parallel to executing its organic plan, the Board will continue to explore potential transactions to de-risk and reduce volatility in R&Q Legacy’s balance sheet

Accredited is a leading program manager, acting as an intermediary between MGAs and reinsurers and providing “A-” rated insurance capacity

• In the six months to 30th June 2023, Accredited achieved Gross Written Premium and Fee Income of $1.1bn and $46m, respectively^(b)
• As at 30th June 2023, the unaudited gross assets and shareholders’ equity of the business subject to the Sale were $4.3bn and $243m and for the six months ended 30th June 2023, the unaudited statutory profit before tax for the business subject to the Sale was $13m^(c)

Onex, formed in 1984, has C$50bn in assets under management (C$8bn of its own investing capital) across two primary businesses, Private Equity and Credit

• Onex’s has a depth of experience with investments in the insurance sector, including Convex, RSG, Cypress Insurance Group and Sedgwick

(a) Closing of the Sale is conditional on R&Q shareholder approval, regulatory approval and customary consents from certain R&Q debt providers. (b) Excluding minority stakes in MGAs. (c) The principal differences between the statutory financial information of the Accredited entities subject to the Sale, and the reported financials for Accredited line of business are in respect of: (i) the inclusion of R&Q Legacy exposure in the Accredited entities; (ii) the inclusion of certain central costs to the Accredited entities that support both program management and legacy; (iii) the inclusion of €25 million of debt in the legal entities and (iv) investment income in the legal entities supporting both program management and legacy insurance