Thoma Bravo puts a price on insurer worries
BREAKINGVIEWS-Thoma Bravo puts a price on insurer worries The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan Guilford
NEW YORK, August 13 (Reuters Breakingviews) - Thoma Bravo is increasingly in the fear trade. The tech-focused buyout shop is acquiring Accelerant ARX.N, an insurance exchange and part of an industry menaced by the prospect of chatbots replacing software and services. Adding to the complex web is the often head-spinning relationship between private equity and underwriters. The $4 billion deal, announced on Thursday, gambles that these worries are peaking.
Accelerant basically stitches together lightly-regulated providers of commercial specialty insurance and offloads the risk on traditional firms. Thoma Bravo’s offer, at $20.25 a share, is marginally below the target's initial public offering price only a little over a year ago. Accelerant’s stock cratered in September as it became clear that much of the third-party buying came from an insurer backed by its controlling owner Altamont Capital Partners, an investment firm that took the company public and now holds an 82% voting stake.
It gets more tangled. Accelerant also owns its own insurers; the bulk of underwritten risk sits on its balance sheet before being passed on, with the company retaining some at the end. As scrutiny of private equity’s affiliated relationships in the industry rises, it’s little wonder such a byzantine arrangement sank the stock nearly down to $9 at its nadir.
That low-point came in February, as the launch of a ChatGPT-powered insurance app panicked investors, crushing valuations. Since then, though, some things have moved Accelerant’s way. Hadron, Altamont’s insurer, accounted for 34% of third-party, directly written premiums in the most recent quarter, down from 67% at the beginning of 2025. As TD Cowen analyst Andrew Kligerman points out, premium volume continues to rise dramatically, an indicator that its supposed special sauce of data and underwriting tech can drive business. More broadly, the S&P Insurance Select Industry Index is up 21% from March doldrums.
For Thoma Bravo, bruised after turning over software firm Medallia to creditors in June, this is a chance to prove that it can burrow into a new niche that can hopefully overcome AI concerns. Altamont is rolling some of its stake, which should help preserve the still-crucial relationship with Hadron. The price is well below the roughly $30 per share at which Accelerant traded at its peak, though a ticking fee that adds to the consideration in the case of certain regulatory slowdowns hints further at the bewildering convolution. The timing is smart. Thoma Bravo’s own risk underwriting is the challenge.
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CONTEXT NEWS
Accelerant announced on August 13 that it had agreed to be acquired by private equity firm Thoma Bravo for $20.25 per share in cash, a 49% premium. Investor Altamont Capital Partners controls 82% of the vote at the specialty insurance marketplace, and has agreed to cast these votes in favor of the transaction.
Morgan Stanley served as financial advisor to Accelerant's board, while Houlihan Lokey advised a special committee of the board. BMO Capital Markets and Wells Fargo are serving as advisors to Thoma Bravo.
(Editing by Jennifer Saba; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on GUILFORD/ Jonathan.Guilford@thomsonreuters.com))