White Mountains Insurance said on Friday it would sell a controlling interest in insurance distribution platform Bamboo to European private equity firm CVC in a deal that values the company at $1.75 billion.
White Mountains had bought a majority stake in Bamboo for nearly $300 million more than a year ago. Shares of Hamilton, Bermuda-based White Mountains rose 5% to $1,750 in premarket trading.
Launched in 2018 by John Chu, Bamboo provides homeowners’ insurance and related products to residential property in California and Texas.
The company reported a record second quarter, with managed premiums surging to $191 million from $120 million a year earlier.
“Bamboo’s mix of high growth and recurring revenue make it an optimal fit for CVC’s US portfolio,” said Lorne Somerville, managing partner and co-head of CVC US.
White Mountains expects net cash proceeds of nearly $840 million from the deal and a gain of roughly $310 to its book value per share.
The company will retain a 15% fully diluted equity stake in Bamboo post-closing, worth $250 million.
The deal is expected to close by the end of the year.
Evercore Group and Piper Sandler are the financial advisers to both White Mountains and Bamboo.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar and Krishna Chandra Eluri)
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