In an industry-shaking move, NSM Insurance Group, a global specialty insurance provider, has offloaded its US commercial insurance division to New Mountain Capital. The investment firm, boasting over $55 billion in assets, now has ownership of NSM’s 15 niche insurance programs across Property & Casualty, Accident & Health, and Reinsurance, as well as its retail agency, NSM Insurance Brokers. Subject to regulatory approvals and customary closing conditions, the deal is expected to wrap up within 45 days, marking a significant milestone in NSM’s history.
New Beginnings for NSM Under New Mountain Capital
NSM’s Diversified Portfolio and Strategic Vision
Leading NSM into a new era, Geof McKernan, the CEO of NSM Insurance, expressed optimism over New Mountain’s involvement in propelling NSM’s growth. Having built a profitable and diversified portfolio over the past 35 years, NSM boasts a competitive edge in the specialty insurance space that is now set to be further enhanced under new leadership. Post-transaction, both Geof and Bill McKernan will be joining the board of the new entity, ensuring a smooth transition and continued strategic vision.
A linchpin in NSM’s journey has been Aaron Miller, NSM’s chief commercial lines officer, who will assume the role of CEO of the newly independent entity. With over two decades of experience in the commercial lines industry, Miller has been instrumental in driving NSM’s growth by expanding product offerings, streamlining operational efficiency, and fostering strong carrier relationships. His leadership is expected to cement NSM’s reputation as a premier provider of specialty insurance solutions.
Strategic Acquisitions and Expansions
This transition is not just about leadership but also about maintaining and building on NSM’s legacy of strategic acquisitions and expansions. Over the years, NSM has successfully crafted a reputation for excellence, with over $2 billion in premiums across 30 niche programs, facilitated by more than 20,000 agents nationwide. Carlyle, which had acquired NSM in 2022, sees this divestiture as a strategic move to sustain NSM’s growth trajectory and market position with New Mountain at the helm.
Carlyle representatives have underscored the positive impact of the sale, expecting NSM’s specialty insurance programs to thrive under New Mountain’s leadership. The anticipated benefits include fortified market presence, enhanced value for NSM’s partners and team, and a reaffirmed commitment to delivering top-notch specialty insurance services. This strategic divestiture underscores Carlyle and NSM’s forward-thinking approach in fostering sustainable growth while keeping their competitive edge intact.
The Role of Advisors and Legal Counsel
Financial and Legal Guidance
The intricacies of such a significant transaction necessitated the expertise of top-tier advisory and legal entities. Carlyle and NSM were represented financially by Houlihan Lokey, while legal counsel came from Wachtell, Lipton, Rosen & Katz, and Polsinelli. This blend of financial and legal expertise was pivotal in ensuring that all regulatory and contractual aspects of the transaction were meticulously handled, paving the way for a seamless transition.
On New Mountain’s side, financial advisory was exclusively provided by Ardea Partners, with legal support offered by Simpson Thacher & Bartlett LLP. These firms brought their considerable expertise and experience to the table, ensuring the transaction met all necessary legal and financial stipulations while aligning with the strategic goals of both parties. Such extensive support underscores the high stakes and profound implications of this deal for the specialty insurance market.
Ensuring Continuity and Market Position
NSM Insurance Group, known globally for its specialty insurance products, has made a groundbreaking move by selling its U.S. commercial insurance division to New Mountain Capital. This prominent investment firm, which manages assets over $55 billion, now owns NSM’s 15 specialized insurance programs. These programs span various sectors including Property & Casualty, Accident & Health, and Reinsurance. Additionally, New Mountain Capital acquires NSM’s retail agency, NSM Insurance Brokers. The completion of this transaction is contingent on regulatory approvals and standard closing conditions, with the deal expected to finalize within a 45-day period. This sale represents a significant chapter in the history of NSM Insurance Group and underscores its strategy to refine its business focus. This move not only promises to enhance New Mountain Capital’s portfolio but also positions both companies for future growth and success, marking a notable shift in the landscape of the insurance industry.
