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Investing.com -- Onex Corp (TSX:ONEX) stock soared 8% in Toronto trade on Thursday after announcing a transformational $7 billion deal to acquire specialty insurer Convex Group alongside American International Group Inc (NYSE:AIG).
The Toronto-based investment firm will own approximately 63% of Convex following the transaction, with AIG holding 35% and Convex management retaining the balance. The acquisition values Convex at 1.9 times its third quarter 2025 tangible book value.
As part of the strategic relationship, AIG will acquire a 9.9% equity stake in Onex for approximately $0.6 billion and commit $2 billion to Onex’s private equity and credit strategies over the next three years.
Onex was a founding investor in Convex in 2019 through its Onex Partners V fund. Since then, Convex has grown into a leading specialty property and casualty (re)insurer with up to $6 billion of expected gross premium written in 2025, representing 25% compound annual growth over the last three years. The company has delivered an 18% average return on equity during that period.
"Today’s announcement is a logical and foundational step forward for Onex," said CEO Bobby Le Blanc. "With these transactions, we are bolstering our already significant position in the insurance sector, securing the support of one of the world’s largest insurers, accelerating profitability of our asset management business and facilitating future growth in our investing capital."
Onex will finance the $3.8 billion acquisition through a combination of rolling over its existing $0.7 billion interest in Convex, $1.5 billion from its balance sheet and pending asset sales, $1.0 billion of debt financing, and the $0.6 billion equity investment from AIG.
Following completion, Convex is expected to represent 42% of Onex’s investing capital. The transaction is anticipated to close in the first half of 2026, subject to regulatory approvals.