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Recent Acquisitions, Disposals & Other Transactions
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Recent Acquisitions, Disposals & Other Transactions Recent Acquisitions, Disposals & Other Transactions
Sale of Trident Brand and Platform
On April 30, 2020, we sold our Trident brand and underwriting platform to Paragon Insurance Holdings, LLC (“Paragon”) and received $38 million in cash, with additional consideration in future periods depending on performance post-closing. We recognized a pre-tax gain of $32.3 million related to the sale, which is included in "Net realized investment gains (losses)" in our Consolidated Statements of Income (Loss) for the year ended December 31, 2020. Trident was one of the business units within our U.S. Operations reporting segment.
Paragon will continue to write business on Argo paper through a managing general agency agreement, and we will retain Trident’s claims operations and provide claims services to Paragon for the public entity business.
Acquisition of Ariel Indemnity Limited
Effective June 12, 2020, Argo Group and our subsidiary Argo Re Ltd. (“Argo Re”) acquired 100% of the capital stock of Ariel Indemnity Limited (“AIL”) for consideration of $55.6 million. The acquisition of AIL was made pursuant to the former owners (the “Sellers”) of Maybrooke Holdings, S.A. (“Maybrooke”) exercising a put option within the Administrative Services Agreement (“ASA”) between the Company and the Sellers. The ASA was part of the stock purchase agreement between the Company and the Sellers related to our February 6, 2017 acquisition of Maybrooke, the since-liquidated holding company of our Ariel Re platform. The $55.6 million sales price is equal to the 2019 year-end tangible net worth of the AIL, less certain administrative costs. Upon acquiring AIL, we dissolved AIL and merged it into Argo Re.
The acquisition is being accounted for in accordance with ASC 805, “Business Combinations.” Purchase accounting, as defined by ASC 805, requires that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values disclosed herein were determined based on management’s best estimates and the finalization of certain valuation analyses during the fourth quarter of 2020. Provisional fair values were recorded in the Company’s interim consolidated financial statements and notes for the period ending September 30, 2020. AIL’s financial position, results of operations, and cash flows were not material to our consolidated financial results as of and for the year ended December 31, 2020. No goodwill or intangible assets were recognized from this transaction.
Reinsurance-to-close ("RITC") of ArgoGlobal Syndicate 1200
On October 12, 2020, ArgoGlobal, the Lloyd’s insurer and member of Argo, announced a reinsurance-to-close (“RITC”) transaction with legacy specialist RiverStone. RiverStone provided an RITC of ArgoGlobal’s Syndicate 1200 for 2017 and prior years with net technical provision of approximately $217 million. The transaction received regulatory approval on January 29, 2021, with the RITC becoming effective on January 1, 2021.
Sale of Ariel Re
On November 25, 2020, we closed on the sale of our reinsurance business, Ariel Re, to Pelican Ventures and J.C. Flowers & Co. Under the terms of the agreement, we received $30 million at closing. Ariel Re is the reinsurance platform through which Lloyd’s Syndicate 1910 reinsurance business is underwritten. We recognized a loss of $9.4 million related to the sale, which is included in "Net realized investment (losses) gains" in our Consolidated Statements of Income (Loss) for the year ended December 31, 2020. Ariel Re is one of the business units within our International Operations reporting segment. Pelican Ventures and affiliates will capitalize the 2021 year of account, and Argo will maintain responsibility for all years of account 2020 and prior. Additionally, in accordance with the transaction agreement, Ariel Re’s equity interests in ArgoGlobal Services (Hong Kong) Limited (“AGSL”) and Ariel Re Bda Limited (“ARBL”) were transferred to Pelican Ventures and J.C. Flowers & Co. AGSL is authorized in Hong Kong by the Insurance Agency of Hong Kong as an insurance agent and is a Lloyd's approved coverholder. ARBL is an exempted company limited by shares, incorporated in Bermuda and registered as an insurance agent under the Bermuda Insurance Act.
Sale of ArgoGlobal Assicurazioni S.p.A
On December 23, 2020, we announced an agreement to sell our Italian operations, ArgoGlobal Assicurazioni, to Perfuturo Capital AG (“Perfuturo”), a Swiss Holding Company. Closing of the transaction is subject to regulatory approval and is expected to occur in early 2021. Pursuant to the Argo Reinsurance Agreement, Argo Re will reinsure substantially all of ArgoGlobal Assicurazioni's legacy business as of the effective date of the agreement for all underwriting years.