Conshohocken, Pa.-based NSM Insurance Group is selling its U.S. commercial insurance division to a New York-based investment firm for an undisclosed amount. The transaction announced Monday is expected to close in the next 45 days following customary regulatory approvals and closing conditions.
New Mountain Capital, an investment firm with over $55 billion in assets under management, is acquiring the division, which encompasses NSM’s portfolio of 15 niche insurance programs across property and casualty, accident and health, and reinsurance, as well as its retail agency, NSM Insurance Brokers.
The programs will form a new independent business entity that will continue to be marketed as NSM until a new brand is established.
“We are excited for this milestone and for New Mountain to help lead the next stage of growth for these well-established specialty insurance brands,” said NSM Insurance Group CEO Geof McKernan. “We are extremely proud of the unique portfolio of programs we have built over the last 35 years that provide a profitable and diversified position in today’s competitive marketplace.”
McKernan added that New Mountain has “an impressive track record” and NSM has confidence in its “expertise, integrity, and commitment to drive NSM forward.”
“We want to thank the entire NSM team for their hard work — this transaction is a win for our team members and all stakeholders involved,” he said.
NSM, a portfolio company of global investment firm Carlyle, has grown and evolved into a global specialty insurance provider with more than $2 billion in premium across more than 30 niche insurance programs since its founding in 1990. Currently, more than 20,000 agents nationwide rely on NSM’s specialized insurance programs to meet the their clients’ needs.
Jim Burr, co-head of financial services at Carlyle, and Jitij Dwivedi, a partner focused on private equity investments in financial services at Carlyle, said the company is proud to have supported NSM’s growth over the last three years through operational improvement, accretive mergers and acquisitions opportunities, and strategic investments in technology, data, and analytics.
“This is a positive outcome for everyone involved, and we believe these specialty insurance programs are well positioned for continued success,” Burr and Dwivedi said in a joint statement. “We look forward to continuing to work with Geof McKernan and the NSM team to grow the company’s remaining direct-to-consumer insurance brands and pursue future strategic acquisitions.”
Robert Mulcare, managing director at New Mountain Capital, thanked the NSM team for doing a great job building an unparalleled specialty insurance distribution platform. “The business has a 35-year track record of market-leading performance and we are delighted to partner to further build the business into the leading independent commercial insurance MGA business in the U.S.,” he said.
New Mountain Capital Director Sean Donovan said New Mountain is “excited by the potential to further accelerate growth through focused investment in the business, the team, and technology, which will drive continued, long-term success.”
NSM’s Geof McKernan and current President Bill McKernan will join the board of directors upon closing of the acquisition, while Aaron Miller, chief commercial lines officer at NSM, will become CEO.
“I look forward to partnering with the New Mountain team and working with my B2B colleagues to propel us toward unprecedented success,” said Miller, noting that the acquisition announcement signals a new and exciting chapter for NSM and its carrier partners, agents, and customers.
“Through this transaction, we are poised to become an even more formidable industry leader while creating greater value for our team members and key partners,” he said.