NSM to sell US commercial insurance division to New Mountain Capital

NSM Insurance Group, a global specialty insurance provider, has signed a definitive agreement to sell its US commercial insurance division to New Mountain Capital, a growth-oriented investment firm.

The agreement includes NSM’s diverse portfolio of 15 niche insurance programs across property & casualty, accident & health, and reinsurance, along with its retail agency, NSM Insurance Brokers.

Together, these programs will form a new independent business entity, which will continue to be marketed as NSM until a new brand is established.

The transaction is expected to close in the next 45 days, subject to regulatory approvals and other customary closing conditions.

NSM was founded in 1990 and has since grown and evolved into a global specialty insurance provider with more than $2 billion in premiums across over 30 niche insurance programs.

Geof McKernan and Bill McKernan will join the Board of Directors upon completing the acquisition to ensure continuity and a smooth transition. Aaron Miller, Chief Commercial Lines Officer at NSM, will become the Chief Executive Officer of the new entity backed by New Mountain.

Miller has over two decades of experience in the P&C commercial lines industry and has held various management and leadership roles. Since joining NSM in 2021, Miller has been instrumental in driving the continued growth and transformation of the B2B programs by enhancing the product offerings, improving operational efficiency and strengthening carrier relationships.

Houlihan Lokey acted as the exclusive financial advisor to Carlyle and NSM. Wachtell, Lipton, Rosen and Katz acted as legal counsel to Carlyle and NSM. Polsinelli acted as legal counsel to NSM. Ardea Partners acted as the exclusive financial advisor, and Simpson Thacher & Bartlett LLP served as legal counsel to New Mountain.

McKernan, Chief Executive Officer of NSM Insurance Group, commented, “Today, 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. 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.

“New Mountain has an impressive track record and we have the utmost confidence in their 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.”

Robert Mulcare, Managing Director at New Mountain Capital, added, “The NSM team has done a tremendous 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.”

Sean Donovan, Director at New Mountain Capital, said, “As a new independent business, we’re 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.”

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, “Carlyle is proud to have supported NSM’s significant growth over the last three years through operational improvement, accretive M&A 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. 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.”

Miller concluded, “I look forward to partnering with the New Mountain team and working with my B2B colleagues to propel us toward unprecedented success. Today’s announcement signals a new and exciting chapter not just for our team but for our 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.”

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