Around $285m from White Mountains is expected to be invested in Bamboo, an MGS focused on California homeowners.
The funds will be used to support Bamboo’s growth and to gain approximately 70% of shares in the firm.
Furthermore, the transaction is expected to close in the first quarter of 2024, subject to regulatory approvals.
Bamboo provides homeowners’ insurance for over 100,000 California policyholders, using its technology-enabled underwriting platform to select and manage risk. Bamboo has grown profitably and rapidly in the challenging California market, and is now poised to expand into other states.
“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,” said 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,” added John Chu, founder and CEO of Bamboo.
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Howden Tiger Capital Markets & Advisory acted as financial advisor to White Mountains, while Cravath, Swaine & Moore provided legal advice. Evercore Group acted as financial advisor to Bamboo and selling equityholders, while Willkie Farr & Gallagher provided legal advice.
With regards to M&A, speciality insurance company Markel has acquired a 49% stake in Certa, a UK-based tax managing general agent (MGA).
Certa will use the proceeds to accelerate product development and expand its geographical footprint.
With the deal, Markel hopes to gain further access to long-term growth opportunities in a speciality line of business.