The transaction values NSM at approximately $388 million, according to the announcement. White Mountains said it intends to fund the acquisition through a combination of cash and new debt issued by NSM.
Pennsylvania-based NSM places in excess of $500 million in premiums annually through about 6,000 brokerage firms and 100 insurance carriers. Its specialty insurance niches include collector cars, non-profit organizations, sports and wellness centers, specialty real estate and pet insurance.
NSM has been growing. In the past 12 years NSM has completed more than 18 transactions and launched eight new programs. The program manager and managing general underwriter said it is “actively seeking” to acquire other program managers and specialty books of business.
“White Mountains brings NSM strong financial backing and a long-term view of the business which will enable us to continue our organic and acquisition growth strategies both in the U.S. and UK,” said Geof McKernan, CEO, NSM Insurance Group, in prepared remarks.
The transaction is expected to close by the end of the second quarter of 2018.
NSM partnered with private equity firm ABRY Partners in 2012 to help fund its acquisition strategy. In 2015, American International Group Inc. acquired a controlling stake in NSM from ABRY and NSM management.