Carlyle Group to acquire NSM Insurance from White Mountains

Acquired specialty insurance provider is valued at $1.775 billion

Carlyle Group to acquire NSM Insurance from White Mountains

Mergers & Acquisitions

By Lyle Adriano

The private equity firm Carlyle Group has entered a definitive agreement to acquire US specialty insurance programs administrator NSM Insurance Group from the Bermuda-domiciled White Mountains Insurance Group.

A release from White Mountains has valued NSM at $1.775 billion. It also noted that White Mountains expects the transaction to lead to an approximately $280 gain to its adjusted book value per share, and it will increase undeployed capital from about $0.4 billion to roughly $1.7 billion.

The transaction is expected to close sometime during the second half of 2022, subject to regulatory approvals and other customary closing conditions.

"The NSM team has done a tremendous job building a market-leading specialty insurance distribution platform.  It has been our pleasure to partner with them along the way," said White Mountains CEO Manning Rountree, who added that the transaction is “a win for both White Mountains shareholders and NSM management and employees.”

"We thank Manning, Morgan, Chris and the rest of the White Mountains team for their valuable contributions and support throughout our partnership," said NSM CEO Geof McKernan. "Together, we achieved strong organic growth, completed six strategic acquisitions, added high-quality talent and built a specialized, diversified and scaled insurance distribution platform.  We could not be happier with this outcome and are excited to partner with Carlyle as we embark on NSM's next stage of growth."

"Leveraging Carlyle's deep experience supporting companies in the insurance services sector, we are thrilled to partner with NSM's exceptional founder-led management team to help the business execute numerous upside growth drivers, including continued operational improvement, accretive M&A opportunities, and strategic investments in technology and data & analytics," said Carlyle head of global financial services John Redett.

Carlyle’s plans for NSM – one of the largest independent insurance brokerages for workers’ comp, pets, nonprofits, trucking, and behavioral healthcare – appear to be pushing for further growth. In a statement to Reuters, Carlyle managing director James Burr said that the firm “will look to invest back into the platform a bit more heavily and ramp up M&A activity.”

"There's a lot of white space in business-to-customer and improving technology,” Burr added.

White Mountains originally acquired a majority stake in NSM Insurance in 2018. In a previous statement, McKernan said that the deal would have enabled NSM to “continue [its] organic and acquisition growth strategies both in the US and UK.”

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