TowerBrook to buy Orchid Underwriters from Gryphon

Gryphon Investors is selling Orchid Underwriters after four years, according to two sources and an FTC filing.

TowerBrook Capital Partners is buying Orchid, the person said. Orchid, of Vero Beach, Florida, sold for a low-double-digit multiple, the source said. Founded in 1998, Orchid provides specialty insurance products for homeowners and other difficult-to-insure properties throughout the U.S. and Caribbean.

Sandler O’Neill + Partners LP advised Gryphon on the sale, the people said.

The FTC website posted news of Orchid’s sale on Dec. 3. An early-termination notice appears on the FTC site after the regulator does an antitrust review of a deal.

Gryphon’s investment in Orchid dates back to November 2014 when it acquired a majority stake. In May 2015, Orchid bought Coastal Agents Alliance to expand its reach in the northeast markets. Orchid, in February 2016, bought Platinum Partners, a wholesale brokerage firm focused mainly on the high-net worth personal lines market.

Gryphon, of San Francisco, operates in the lower end of the middle market. It targets companies with $25 million to $250 million in annual revenues. Sectors include business services, consumer products and services, healthcare and industrial growth.

Gryphon in September acquired a majority of Transportation Insight, which provides logistics and transportation brokerage services. It sold Washington Systems, which supplies specialty chemicals and technical services, to Kao Corp in August.

The firm has been fundraising for its latest flagship. Gryphon Partners V was seeking $1.5 billion, according to a December 2017 SEC filing. Credit Suisse is the placement agent, the filing said.

Gryphon’s fourth flagship closed on $1.1 billion in November 2015.

TowerBrook, of New York and London, makes control investments in large and mid-market companies. The firm agreed to sell Wilton Brands, a baking and cake decorating company, to Dr. August Oetker KG in September. In March, the firm’s structured opportunities fund acquired a minority of JJA, a French provider of home furnishings.

TowerBrook’s fifth private equity fund closed on $4.25 billion in June, while its second structure opportunities pool collected $1.05 billion.

Executives for Orchid, TowerBrook and Gryphon declined comment.

Action Item: For more information on Orchid contact CEO Brad Emmons at +1 866-370-6505