Exclusive-Carlyle to acquire NSM Insurance from White Mountains in $1.78 billion deal

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(Reuters) -Private equity firm Carlyle Group (NASDAQ:CG) 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.

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.