White Mountains Insurance Group, Ltd. has entered into an agreement to acquire a majority stake in Bamboo Ide8 Insurance Services, LLC, a provider of homeowners’ insurance for over 100,000 California policyholders.
White Mountains is expected to invest approximately $285 million in the capital-light, tech and data-enabled insurance distribution platform, along with primary capital to support Bamboo’s growth.
The firm will acquire approximately 70% of Bamboo’s basic shares outstanding. Although, the exact ownership to be acquired and the resulting amount that will be invested, will be determined based on Bamboo unitholder elections made prior to closing, which is expected in Q1 2024.
Launched in 2018 by John Chu, Bamboo is an MGA that offers insurance to the residential property market in California.
Chu and the current Bamboo management team will continue to lead the business through its next phase and will retain a significant equity stake.
Chris Delehanty, Head of M&A of White Mountains, commented: “We are pleased to make this investment alongside John and the Bamboo management team. Bamboo is delivering a much-needed insurance alternative to homeowners in California. Bamboo has strong momentum, and we look forward to supporting its continued growth.”
Chu, Founder and CEO of Bamboo, added: “This transaction marks a new and exciting chapter for Bamboo. We are fortunate to have found a like-minded capital partner who shares our vision and has a strong track record of successful insurance partnerships.”
Bamboo has grown profitably and rapidly in the challenging California market, and is now set to expand into other states.
Howden Tiger Capital Markets & Advisory acted as financial advisor to White Mountains, while Cravath, Swaine & Moore LLP provided legal advice.
Evercore Group, L.L.C. acted as financial advisor to Bamboo and selling equityholders, while Willkie Farr & Gallagher LLP provided legal advice.
