White Mountains Insurance Group, a Bermuda-domiciled financial services holding company, stated it has agreed to invest about $285 mn in California homeowners-focused managing general agent Bamboo Ide8 Insurance Services, to acquire a majority stake and increase capital for growth.
Bamboo provides homeowners coverage for over 100,000 California policyholders and plans to expand into other states, according to the company.
White Mountains also announced it has reached an agreement to acquire a majority stake in managing general agent Distinguished Programs for $230 mn.
The company will acquire approximately 50% of the outstanding equity interests of Distinguished in this transaction, which adds to the roughly 1% it already owns.
The transaction is expected to close in the third quarter, subject to regulatory approvals and customary closing conditions.
We are pleased to make this investment alongside John and the Bamboo management team. Bamboo is delivering a much-needed insurance alternative to homeowners in California. Bamboo has strong momentum, and we look forward to supporting its continued growth
Chris Delehanty, Head of M&A of White Mountains
“This transaction marks a new and exciting chapter for Bamboo. We are fortunate to have found a like-minded capital partner who shares our vision and has a strong track record of successful insurance partnerships,” said John Chu, Founder and CEO of Bamboo.
Bamboo was launched in 2018 by John Chu, a seasoned insurance executive. Bamboo Ide8 is a full-service MGA, meaning it handles the entire insurance placement process, from product development and underwriting to policy issuance and claims oversight.
The current Bamboo management team, led by John Chu, will continue to lead the company and retain a significant equity stake.
Aquiline Capital Partners, the current controlling stakeholder of Distinguished, will remain a significant stakeholder following the transaction.
Distinguished’s current management team, led by Bill Malloy, Jason Rotman, and Steve Sitterly, will continue to lead the business and retain equity stakes.
Manning Rountree, chief executive officer of White Mountains, stated that the MGA operates in an attractive and dynamic market.
Distinguished, an MGA and program manager, places more than $550 mn in premiums annually across a diversified portfolio of 12 specialty property/casualty programs.
Its lines include commercial real estate, hotels and restaurants, community associations, environmental and construction professional, cyber, surety, executive lines, inland marine, and fine arts and collectibles.
Cravath, Swaine & Moore acted as legal adviser to White Mountains. Willkie Farr & Gallagher advised the company and Aquiline Capital Partners. Mayer Brown served as legal adviser to Distinguished’s management team.
