Lee Equity Partners LLC said May 14 that it agreed to buy a majority of K2 Insurance Services LLC. Financial terms weren’t announced. K2 is a specialty insurance holding company. Endeavour Capital and Patrick Kilkenny, a founder, are exiting. The deal calls for Aegis Security Insurance Co to be spun off and remain under Endeavour’s and Kilkenny’s ownership. Evercore advised Lee Equity while TigerRisk Capital Markets & Advisory provided financial advice to K2.
NEW YORK, May 14, 2019 – Lee Equity Partners, LLC (Lee Equity), a growth oriented middle market private equity firm, today announced that it has signed a definitive agreement to acquire a majority ownership interest in K2 Insurance Services, LLC (K2), a leading specialty insurance services holding company, which owns and controls a diverse group of managing general agents (MGAs) serving the specialty property and casualty industry.
K2’s experienced senior management team, under the leadership of Bob Kimmel – President and CEO, will continue to lead the company and will retain a meaningful equity stake in the business. As part of the transaction, K2’s specialty insurance carrier, Aegis Security Insurance Company, will be spun off and remain under the ownership of Endeavour Capital and Patrick Kilkenny.
The transaction is expected to close in the second quarter of 2019. Financial terms of the transaction were not disclosed.
Based in San Diego, California, K2 is a specialty insurance services holding company, which owns a diverse group of MGAs that underwrite and distribute specialty property and casualty insurance products. K2’s fourteen MGAs each serve a unique, niche insurance end market. In aggregate, K2’s program managers write over $650 million of specialty insurance premiums.
“Since our founding in 2011, K2 has become one of the fastest growing and largest program managers in the U.S. with a focus on generating industry leading underwriting results for our carrier partners,” said Bob Kimmel, President and CEO of K2. “With Lee Equity’s knowledge and experience investing in the insurance industry, we look forward to continue to build on our proven track record of attracting high quality specialty underwriting teams, acquiring specialty MGAs and growing organically by offering our MGAs new distribution channels, technology enhancements and access to additional carrier partnerships.”
Over the course of the past eight years, K2 has made significant progress on its growth strategy, expanding its business across various specialty insurance lines while building a diverse, loyal network of distribution partners and world-class carriers and reinsurers. With its market-leading position and the support of Lee Equity, K2 will be well positioned for continued organic and acquisition driven growth.
“K2 has emerged as a market leader in the fast-growing MGA segment, and we are thrilled to partner with Bob and his team for K2’s next chapter of growth,” said Mark Gormley, a Partner at Lee Equity. “K2’s differentiated platform is well positioned to continue revolutionizing the insurance sector by leveraging technology to achieve unparalleled operational efficiencies and deliver superior underwriting performance.”
“We believe K2 will accelerate its already impressive growth trajectory as K2’s specialization, diversification and its tech-enabled, end-to-end operating platform will continue to attract top quality underwriters to join K2,” added Daniel Rodriguez, a Partner at Lee Equity.
Lee Equity has extensive investment experience in the financial services, business services and healthcare services sectors. Over the past decade, Lee Equity has invested and committed approximately $1.7 billion in more than 20 lower middle market companies and 50 add-on acquisitions.
TigerRisk Capital Markets & Advisory is acting as exclusive financial advisor to K2 for this transaction and Evercore is acting as exclusive financial advisor to Lee Equity for this transaction.
K2 Insurance Services, LLC is an insurance services holding company, which owns and controls a diverse set of specialty program administrators. Through its MGAs, K2 markets, underwrites and services over $650 million annually in niche commercial and personal insurance premiums. From workers’ compensation for high hazard exposures such as commercial transportation to personal lines coverage for manufactured homes, K2 helps insure clients across a diverse array of risks and industries. K2 is headquartered in San Diego, California and is a privately held company. For more information, visit www.k2ins.com.
About LEE EQUITY PARTNERS
Lee Equity is a New York-based private equity firm that partners with successful management teams to build companies with strong growth potential. Lee Equity targets equity investments of $50 million to $100 million in middle market control buyouts and growth capital financings in companies with enterprise values of $100 million to $300 million which are located primarily in the United States. The firm invests in a range of industries where the team has deep relationships developed over decades, including financial, healthcare and business services and consumer. Current Lee Equity investments in the insurance services sector include Captive Resources, LLC and McLarens Global Limited. For more information, visit