Flagstone Enters Definitive Agreement With ANV For The Sale Of Flagstone’s Lloyd’s Operations

Flagstone Reinsurance Holdings, S.A. (NYSE: FSR) (the “Company”) today announced that it has entered into a definitive agreement with a wholly-owned subsidiary of ANV Holdings BV (“ANV”), under which ANV, with capital support from Ontario Teachers’ Pension Plan Board, will acquire the Company’s Lloyd’s operations for approximately $48 million in cash. As a result of the transaction, Flagstone will also release approximately $162 million of underwriting capital currently supporting its Lloyd’s operation.

David Brown, Flagstone’s Chief Executive Officer, said, “We are pleased to have reached this agreement with ANV, which represents a significant next step in Flagstone’s strategic business realignment and positions us closer to our desired corporate structure. The divestiture will enhance our focus on our core businesses and, along with other strategic actions already underway, will create additional capital to pursue our business. All told, we are well on our way to establishing a more nimble, cost-effective and opportunistic structure, enabling us to adapt more quickly as market changes dictate. Moving forward, we will maintain our strong technical, analytical approach and will continue to provide exemplary service for our clients and seek to create value for our shareholders.”

Flagstone’s underwriting strategy will continue to focus on certain of its property and property catastrophe units, leveraging existing strengths to improve performance. Flagstone is maintaining its current investment strategy, which focuses on significant liquidity and security, to provide a stable capital base with which to underwrite.

The transaction is expected to be completed before the end of the second quarter of 2012, subject to the satisfaction of customary regulatory approvals and certain other customary closing conditions. The cash price payable on completion will be subject to a purchase price adjustment to reflect any changes in the net assets of the Lloyd’s operations in the first quarter of 2012.

Evercore Partners is acting as financial advisor, and Sidley Austin (London) is acting as legal advisor, to Flagstone in connection with the transaction.

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