New Mountain to Invest $500M to $600M In AmWINS, in Firm’s Biggest Investment Ever

With its buy of AmWINS Group, New Mountain Capital has made its largest investment in its 12-year history.

Charlotte, N.C.-based AmWINS on Tuesday announced it had reached a deal with New Mountain for a $1.3 billion “growth-oriented recapitalization.” New Mountain is buying the stake owned by Parthenon Capital Partners, as well as some shares held by management and other investors, says Alok Singh, a New Mountain MD. New Mountain will end up owning about 70%, while AmWINS shareholders will have roughly 30%, he says.

AmWINS is the largest wholesale insurance broker in the United States by premiums placed. New Mountain is investing roughly $500 million to $600 million equity in the deal, sources say. AmWINS shareholders are injecting $160 million, according to a statement.

Singh refused to disclose how much the PE firm is investing. “It is a lot,” he told peHUB. “It’s our largest equity deal. It’s a very significant statement of support for the company.”

The New York PE firm had to outmaneuver some high-profile competitors for AmWINS. Parthenon, which acquired a majority stake in the company in 2005, put the company up for sale earlier this year, Reuters reported. Financial Technology Partners was tapped to run the process.

The 10 initial bidders vying for AmWINS were whittled down to four a month ago, sources say. The four included Bain Capital, KKR, New Mountain and Oak Hill, sources say. New Mountain “out-nimbled” the other PE firms, one person says. “There was a race to get the deal done,” the source says. “New Mountain really moved quicker and was the preferred bidder.”

New Mountain’s relationship with M. Steven DeCarlo, AmWins CEO, helped tip the scales in their favor, Singh says. The PE firm reached out to DeCarlo and his senior management team over a year ago, he says. “It was very important for them to pick the right partner,” Singh says.

The transaction, subject to regulatory approval, is expected to close in 90 days. AmWINS will stay independent and there will be no changes to management, Singh says. “Anytime you can partner up with people you like it’s got to be a happy day,” he says. “We look forward to working with [AmWINS] for many years to come.”

New Mountain is an experienced insurance investor. Prior deals include Paris Re Holdings and Validus Holdings (Singh is on the board of Validus). New Mountain is investing out of its third PE fund, which has more than $5.1 billion in aggregate commitments, according to the firm’s web site. The firm typically invests from $100 million to $500 million per deal, the web site says.

AmWINS’ financial advisors include Steve McLaughlin and Larry Furlong of Financial Technology Partners, as well as Goldman Sachs and Willis Capital Markets. Credit Suisse and Macquarie Capital provided financial advice to New Mountain.

Photo image of money wave courtesy of Shutterstock.