White Mountains to sell NSM Insurance Group to Carlyle for $1.8bn

White Mountains Insurance Group, a Bermuda-domiciled financial services holding company, has agreed to sell NSM Insurance Group to investment funds affiliated with Carlyle for $1.775 billion.

NSM Insurance Group is a US-based full-service managing general agent (MGA) and program administrator for specialty property and casualty insurance.  It places insurance in niche sectors like social services, specialty transportation, pet, and real estate.

The MGA, on behalf of its insurance carrier partners, usually handles all aspects of the placement process such as product development, underwriting, marketing, policy issuance and claims.

John Redett — Carlyle Head of Global Financial Services said: “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.”

White Mountains Insurance Group anticipates the deal to result in a gain of around $280 to its adjusted book value per share and will boost undeployed capital from about $400 million to nearly $1.7 billion.

Manning Rountree — CEO of White Mountains Insurance Group said: “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.

“This transaction is a win for both White Mountains shareholders and NSM management and employees. We want to thank Geof, Bill, Marc, Jonathan and the entire NSM team for all of their hard work. NSM is well positioned going forward, and we wish them continued success.”

The deal, which is subject to regulatory approvals and other customary conditions, is expected to be wrapped up during the latter half of this year.