Carlyle to acquire NSM Insurance from White Mountains in $1.78 billion deal

White Mountains Insurance

09/05/2022 17:12

(Adds advisers, paragraph 8)
    By Chibuike Oguh
    May 9 (Reuters) - Private equity firm Carlyle Group Inc
 CG.O  told Reuters on Monday it has agreed to acquire U.S.
specialty insurance provider NSM Insurance Group from White
Mountains Insurance Group Ltd  WTM.N  for $1.78 billion in cash.
    Carlyle said the deal is expected to close in the second
half of this year. The transaction is expected to add $280 per
share to White Mountains' adjusted book value.
    Pennsylvania-based NSM Insurance is one of the largest
independent insurance brokerages that underwrites policies for
pets, non-profit organizations, workers' compensation, trucks 
and behavioral healthcare. It generates more than $1 billion in
premiums from more than one million clients, according to its
website. 
    "We will look to invest back into the platform a bit more
heavily and ramp up M&A activity," James Burr, a Carlyle
managing director, said in an interview. "There's a lot of white
space in business-to-customer and improving technology."
    Private equity firms have been driving consolidation in the
insurance brokerage sector. Mergers and acquisitions in the
insurance sector more than doubled in volume to a total of $58
billion in 2021 from $22 billion a year earlier, according to
consulting firm Deloitte.
    In 2021, Carlyle sold its majority stake in London-based
insurance brokerage PIB Group to private equity firm Apax Group
for an undisclosed amount.
    Carlyle has invested more than $10 billion in the financial
services space, including payroll services provider BenefitMall,
U.S. insurance claims firm Sedgwick Claims Management Services 
and China's Ant Group.
    In the NSM Insurance deal, Carlyle and Bermuda-based White
Mountains were advised by Morgan Stanley, J.P. Morgan, Wachtell,
Lipton, Rosen & Katz, and Cravath, Swaine & Moore LLP.

 (Reporting by Chibuike Oguh in New York
Editing by Greg Roumeliotis and Will Dunham)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022))