Carlyle to Acquire NSM Insurance from White Mountains in $1.78 Billion Deal

Private equity firm Carlyle Group Inc told Reuters on Monday it has agreed to acquire U.S. specialty insurance provider NSM Insurance Group from White Mountains Insurance Group Ltd for $1.78 billion in cash.

Source: Financial Post | Published on May 9, 2022

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 wide 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 a 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.