Onex, AIG enter agreement to acquire Convex for $7B

Onex Corporation (ONEXF) announced a transformational investment and new strategic relationship to accelerate growth and drive enterprise value creation. The benefits to Onex include: The acquisition of a market leading specialty property and casualty insurance and reinsurance business with a proven management team that is positioned for continued strong growth. Onex was a founding investor in Convex Group in 2019 through Onex Partners V and has worked closely with Stephen Catlin, Paul Brand and the Convex management team to build the business into a highly successful, fast growing and profitable organization. A strategic investment by American International Group (AIG) to acquire a 9.9% stake in Onex. AIG will invest $2B of new fee generating assets under management in Onex’ private equity and credit strategies consistent with its investment guidelines. A more efficient future deployment of Onex’ balance sheet, with continued flexibility for deployment into core areas of expertise, to drive strong long-term investing capital growth. Onex and AIG have entered into an agreement to jointly acquire the entire interest held by Onex Partners V and its co-investors in Convex. Following the acquisition, Onex and AIG will own approximately 63% and 35%, respectively, of Convex, with the remainder held by the Convex management team. The acquisition values Convex at a $7B equity valuation, representing 1.9x Q3 tangible book value. Stephen Catlin, Paul Brand and the Convex management team founded Convex in 2019 as a de novo insurer in partnership with capital provided by Onex Partners V and its co-investors. Since that time, Convex has rapidly grown into a leading specialty property and casualty insurer with: Up to $6B of expected gross premium written in 2025, 25% compound annual growth in gross premium written over the last three years, and 18% average return on equity over the past three years. The Convex management team will retain a significant economic interest in the business, ensuring strong ongoing alignment with Onex and AIG. A portion of Convex’s investment portfolio is currently allocated to Onex-managed funds, and that is expected to increase over time. In connection with the transaction, AIG has agreed to subscribe for a 9.9% interest in Onex’ subordinate voting shares, concurrent with the closing of the Convex acquisition, for proceeds totalling approximately $0.6B. AIG will also make capital commitments of $2B to strategies managed by Onex over a three-year period, driving a significant benefit to Onex’ fee-related earnings. AIG will enter into an investor rights agreement that, among other things, includes a minimum three-year lock-up on the shares acquired, customary standstill provisions and the right to nominate a director to Onex’ board and who will be mutually agreed upon by Onex and AIG. Onex intends to use the proceeds from the AIG subscription to fund the acquisition. Pursuant to the acquisition, Onex will acquire a 63% equity stake in Convex for approximately $3.8B. Onex intends to roll over its existing interest in Convex of $0.7B, with the remainder financed through $1.5B of cash on Onex’ balance sheet and pending asset sales, $1B of debt financing secured on existing private equity and credit assets, and $0.6B of equity financing proceeds from the AIG subscription. Following the completion of all transactions, Convex is expected to account for 42% of Onex’ investing capital and become a key contributor to future shareholder value creation. The transaction is expected to close in the first half of 2026, subject to customary regulatory approvals.