Ethos Capital, BCI & White Mountains acquire stake in broker BroadStreet

An investor group led by Ethos Capital, British Columbia Investment Management Corporation (BCI), and White Mountains Insurance Group will acquire an ownership position in BroadStreet Partners.

Under the terms of the agreement, Ontario Teachers’ Pension Plan will maintain a significant co-control stake and operate in partnership with the Ethos-led investor group.

BroadStreet is an insurance brokerage specialising in commercial and personal property and casualty, as well as employee benefits, that partners with independent insurance agencies, Core Agency Partners, to complement its M&A capabilities and capital solutions.

BroadStreet has a co-ownership model with more than 800 colleagues that own equity in their local Core Agencies, creating a focused alignment between the groups.

The partnership with Ethos and its co-investors will support BroadStreet’s long-term plans, including its continued investment in technology and digital transformation.

Mike O’Connor, Chief Executive Officer, BroadStreet, commented, “BroadStreet is uniquely positioned as the partner of choice for successful entrepreneurs seeking new avenues for growth.

“Our differentiated co-ownership model and proven strategy empower our 30 Core Agency Partners to scale their businesses with confidence. For over a decade, the Ontario Teachers’ team has been a value-added partner to us. We are excited to continue this collaboration and now join forces with Ethos, BCI, and White Mountains, leveraging their collective expertise to enhance our capabilities and drive sustained growth.”

Rick Miley, Founder and Board Member, BroadStreet added, “We are proud of the tremendous growth that we have achieved on our journey over the last dozen years with the support of Ontario Teachers’. We now look forward to continuing and strengthening that partnership with the addition of the new Ethos-led investor group.

“We see tremendous value in being able to tap into the combined expertise of the Ontario Teachers’ and Ethos-led teams to the benefit of our Core Agency leaders. By coming together, BroadStreet is taking a significant step forward on our mission to become the preferred home for premier insurance agencies in North America.”

Ontario Teachers’ acquired a majority stake in BroadStreet in 2012 and has actively supported the organisation’s growth by focusing on long-term value creation.

Jeff Markusson, Senior Managing Director, Private Capital, Ontario Teachers’ and BroadStreet Board Member, added, “BroadStreet has experienced tremendous growth as a result of its unique co-ownership model and strong management team.

“As we continue to focus on creating long-term value at BroadStreet, we are delighted to bring in like-minded partners with a proven track record in the insurance industry. Ethos and its co-investors share our vision of growing BroadStreet into the premier insurance brokerage company in North America by capitalizing on sectoral tailwinds and accelerating both organic and inorganic growth efforts.”

Meanwhile, Ethos Capital explained that it invests in companies with a proven business model and management team. The firm’s Executive Partner model pairs experienced investors and industry practitioners with the leaders of its portfolio companies, partnering in their growth.

Brent Stone, Managing Partner, Ethos Capital, said, “BroadStreet has developed a highly differentiated business model – consistently building its expertise and scale through its industry network and a growing set of Core Agency Partners.

“Our Ethos leadership team and co-investors have significant experience in accelerating growth and long-term value creation for high-performance companies including in the insurance sector. We look forward to partnering with an executive of Mike’s caliber and his team to pursue their future growth ambitions.”

Ardea Partners was the lead financial advisor to Ontario Teachers’ and BroadStreet, while RBC Capital Markets and BMO Capital Markets served as co-advisors.

Latham & Watkins LLP and Torys LLP acted as legal counsel to Ontario Teachers’ and BroadStreet, while Kirkland & Ellis LLP was legal counsel to Ethos Capital.

Debevoise & Plimpton LLP served as legal counsel to BCI. Cravath, Swaine & Moore LLP served as legal counsel to White Mountains.

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