Carlyle to acquire NSM Insurance Group

White Mountains has agreed to sell NSM Insurance Group to Carlyle. The transaction puts NSM at a valuation of $1.775 billion. J.P. Morgan Securities LLC acted as financial advisor to White Mountains and NSM on the deal while Morgan Stanley was financial advisor to Carlyle. NSM Insurance Group is a MGA and program administrator for specialty property & casualty insurance.

PRESS RELEASE

HAMILTON, Bermuda and New York, NY, May 9, 2022 /PRNewswire/ — White Mountains Insurance Group, Ltd. (NYSE: WTM) (“White Mountains”) announced today that it has signed a definitive agreement to sell NSM Insurance Group (“NSM”) to investment funds affiliated with global investment firm Carlyle (NASDAQ: CG). The transaction values NSM at $1.775 billion.

White Mountains expects the transaction will result in a gain of approximately $280 to its adjusted book value per share and will increase undeployed capital from approximately $0.4 billion to approximately $1.7 billion.

“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 Manning Rountree, Chief Executive Officer of White Mountains. “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.”

“We thank Manning, Morgan, Chris and the rest of the White Mountains team for their valuable contributions and support throughout our partnership,” said Geof McKernan, Chief Executive Officer of NSM. “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 John Redett, Head of Global Financial Services at Carlyle.

The transaction is expected to close during the second half of 2022. The closing is subject to regulatory approvals and other customary closing conditions. The closing is not subject to a financing condition.

White Mountains will file a current report on Form 8-K with the U.S. Securities and Exchange Commission containing a summary of terms and conditions of the proposed transaction.

J.P. Morgan Securities LLC acted as exclusive financial advisor, and Cravath, Swaine & Moore LLP served as legal counsel, to White Mountains and NSM. Holland & Knight LLP also acted as legal advisor to NSM management. Morgan Stanley & Co. LLC acted as financial advisor, and Wachtell, Lipton, Rosen & Katz acted as legal advisor to Carlyle.

About NSM Insurance Group
NSM is a full-service MGA and program administrator for specialty property & casualty insurance. The company places insurance in niche sectors such as specialty transportation, social services, real estate and pet. On behalf of its insurance carrier partners, NSM typically manages all aspects of the placement process, including product development, marketing, underwriting, policy issuance and claims. For more information, visit www.nsminc.com.