White Mountains Insurance to Sell Unit to CVC in $1.75 Billion Deal

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.

Shares of Hamilton, Bermuda-based White Mountains jumped nearly 11%. The stock had lost 14% so far this year, as of last close.

White Mountains will reap a significant return from the deal, having bought a majority stake in Bamboo in January 2024 for nearly $300 million to enter the California homeowners’ insurance market.

The company expects net cash proceeds of nearly $840 million and a gain of roughly $310 to its book value per share from the deal.

Bamboo was launched in 2018 after several wildfire losses in California, a market where some large national insurers have scaled back their presence in recent years due to frequent natural disasters.

Founded and led by John Chu, Bamboo provides homeowners’ insurance and related products to the residential property market.

Under White Mountains’ ownership, Bamboo has grown rapidly, with managed premiums more than doubling to $484 million in 2024.

Initially a pure-play California homeowners’ insurance agency, Bamboo is now expanding into other states.

Last month, Bamboo announced its expansion into the Texas homeowners insurance market.

“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 is holding company that owns and manages businesses in the insurance and financial services industries.

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)