White Mountains swoops for MGA focussed on California market
Bermuda-based White Mountains Insurance Group is acquiring an MGA focussed on the challenging California homeowners insurance market, in a $285 million deal brokered by Howden Tiger.
White Mountains has entered into an agreement to acquire a majority stake in Bamboo Ide8 Insurance Services. White Mountains expects to invest approximately $285 million, including primary capital to support Bamboo's growth, and to acquire approximately 70% of Bamboo basic shares outstanding.
Bamboo was launched in 2018 by John Chu, a seasoned insurance executive. The MGA provides homeowners' insurance for over 100,000 California policyholders, using its technology-enabled underwriting platform to select and manage risk. It has grown profitably and rapidly in the challenging California market, and is now poised to expand into other states, the company said. Chu and the current Bamboo management team will continue to lead the business through its next phase and will retain a significant equity stake.
The transaction is expected to close in the first quarter of 2024, subject to regulatory approvals.
The exact ownership to be acquired by White Mountains, and the resulting amount that will be invested, will be determined based on Bamboo unitholder elections made prior to closing.
Chris Delehanty (pictured), Head of M&A of White Mountains, said: "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."
Chu, founder and CEO of Bamboo, said: "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."
Howden Tiger Capital Markets & Advisory acted as financial advisor to White Mountains.
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