Another Bermudan at Lloyd's. Deal is £11m cash plus replacing £90m debt.

Max Capital is to acquire Imagine Lloyd's from Imagine.

The deal is the latest in a number of Bermudan purchases of Lloyd's insurers.

The agreement also includes the acquisition of Imagine Lloyd's operations in Denmark and Japan.

Imagine Lloyd's, through Lloyd's Syndicates 1400, 2525 and 2526, underwrites property catastrophe, financial institutions, personal accident, employers' and public liability, and professional indemnity business.

Max Capital's current operations are in Bermuda, Ireland and the United States.

Marty Becker, Chairman and Chief Executive Officer of Max Capital, said: "This Lloyd's operation is an ideal fit for Max. Through this acquisition, we will further diversify our business and achieve access to the important benefits of Lloyd's market participation. We are impressed by Imagine Lloyd's talented underwriting team, led by Underwriting Director Matthew Petzold, and that team's commitment to controlled growth, which dovetails well with Max's long-standing policy of disciplined underwriting and prudent investing."

Iain Bremner, Managing Director at Imagine Lloyd's, said: "We are pleased to be joining Max Capital and look forward to working with them to build for the future. I believe that what we have created at Imagine Lloyd's will enhance Max Capital's already well-regarded insurance and reinsurance operations and that being part of the Max Capital organisation will bring us opportunities to develop our business further. Our managed syndicates, including their third-party capital providers, can be expected to benefit over time from the strength of the combined group."

Total transaction consideration is expected to be approximately £11m paid in cash derived from ongoing operations. In addition, Max Capital will replace letters of credit totaling approximately £90m that an affiliate of Imagine has provided to fund Imagine Lloyd's syndicate commitments.

The acquisition is conditioned on the receipt of various approvals including those from the Financial Services Authority and Lloyd's. Following completion of the transaction, Imagine Lloyd's is expected to be re-branded as "Max Lloyd's Ltd."

Merrill Lynch was financial advisor to Max Capital on this transaction.