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Warburg Pincus set to acquire K2 Insurance Services from Lee Equity Partners

1st December 2022 - Author: Jack Willard

Leading independent specialty insurance program manager, K2 Insurance Services, has announced that Warburg Pincus, a leading global growth investor, has agreed to acquire the company from Lee Equity Partners, LLC, a growth oriented middle market private equity firm.

k2-insurance-services-logoThe investment will support K2’s continued growth strategy, which includes M&A and de-novo incubation, as well as its commitment to offering best-in-class services to clients.

Terms of the transaction were not disclosed.

K2 has a diversified portfolio of that consists of 24 specialised programs across four key segments: Specialty Commercial, Specialty Transportation, International, and Personal Lines.

Furthermore, K2 International is the London market operation of San Diego based K2 Insurance Services, LLC – which owns and controls a wide variety of specialty underwriting businesses that generate diverse earnings streams and improve distribution economics.

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Additionally, K2 Parametric Insurance Services, LLC, is a parametric insurance specialist MGA subsidiary of K2 Insurance Services, LLC.

The company is led by CEO and Co-founder Bob Kimmel, an insurance industry veteran with more than 30 years of experience across the industry.

TigerRisk Capital Markets & Advisory, J.P. Morgan and Marsh Berry & Co. acted as financial advisors, Wachtell, Lipton, Rosen & Katz served as legal counsel, Locke Lord LLP served as regulatory counsel, Ernst & Young acted as accounting advisor and Kirkland & Ellis LLP served as financing counsel to Warburg Pincus.

Additionally, KPMG LLP acted as accounting advisor and Ropes & Gray LLP served as legal counsel to K2 and Lee Equity. Morgan Stanley & Co. LLC acted as financial advisor to K2.

“I am incredibly proud of our achievements and growth since K2 was founded over ten years ago. Partnering with Warburg Pincus, who has a long-standing track record of cultivating world-class businesses, reflects the hard work and strong culture of our team, loyalty of our customers, and cements our position as a leading underwriting and distribution franchise in the program insurance market,” said Kimmel.

“We would also like to thank Lee Equity for their tremendous partnership and support over the past three years.”

Michael Martin, Managing Director, Head of Financial Services, Warburg Pincus, added: “K2 is truly a differentiated platform, offering a full suite of services to a diversified portfolio of programs that are supported by deep carrier relationships. K2’s management team has extensive industry experience and a demonstrated track record of growing insurance businesses.”

Jeff Stein, Managing Director, Warburg Pincus, added: “As a long-term investor in the insurance sector, we believe K2 has significant growth potential and are excited to partner with Bob and the K2 team to build upon the company’s history of success and expand their offerings in this dynamic and growing market.”

Danny Rodriquez, Partner, Head of Financial Services, Lee Equity, said: “We are very proud of K2’s tremendous growth during our partnership and would like to thank Bob and the broader management team for the opportunity to partner with them and for their tireless effort that catalyzed the company’s success.”

Mark Gormley, Partner, Lee Equity, also commented: “Amongst the many insurance businesses that I have had the opportunity to work with, I can confidently say that the quality of K2’s team and platform differentiates it amongst its peers to the benefit of its carrier partners, distributors, and broader stakeholder base. We’ll continue to eagerly follow the company’s success through this next stage.”

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