White Mountains Insurance Group has announced that it will acquire a majority equity stake in NSM Insurance Group, a specialty re/insurance program administrator, in a transaction that values NSM at approximately $388 million.
NSM places over $500 million in premiums annually, and serves as a critical intermediary in the specialty re/insurance market through its relationship with around 6,000 brokerage firms and 100 re/insurance carriers.
It has interests in a wide range of specialty re/insurance sectors, including collector cars, non-profit organisations, sports & wellness centres, specialty real estate and pet insurance.
White Mountains will fund the transaction through a combination of cash on hand and new debt issued by NSM.
“We are pleased to make this investment in NSM alongside the management team. The company is high quality, and we believe there is tremendous opportunity to grow and expand the business,” said Manning Rountree, Chief Executive Officer (CEO) of White Mountains.
He added: “We look forward to working with Geof and his team and to providing them with support and resources to continue to grow the business organically and through acquisitions.”
Geof McKernan, CEO of NSM, also commented: “This transaction marks a new and exciting chapter of growth for NSM. We are thrilled to have the support of an experienced insurance investor with a long-term capital base as we set our course toward future success.
“We look forward to working with the White Mountains team to continue to execute on our growth strategy while delivering the best solutions and services to our insurance carrier partners.”
The deal is expected to be completed by the end of 2018’s second quarter, although it remains subject to regulatory approval and other closing conditions.
