March 27, 2023

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K2 Insurance Services, an independent specialty insurance program manager, announced that Warburg Pincus, a global growth investor, has agreed to acquire the company from Lee Equity Partners LLC, a middle market private equity firm. According to K2, the investment will support firm’s continued growth, including M&A and de-novo incubation, and its commitment to offering best-in-class services to clients.

Terms of the transaction were not disclosed.

Based in San Diego, K2 Insurance Services is a privately held insurance services holding company, which owns and controls 24 specialty program administrators across four key segments: Specialty Commercial, Specialty Transportation, International, and Personal Lines. Through its MGAs, K2 markets, underwrites, and services over $1 billion annually in niche commercial and personal insurance premiums. From workers’ compensation for high hazard exposures such as commercial transportation to personal lines coverage for manufactured homes, K2 helps insure clients across a diverse array of risks and industries.

“I am incredibly proud of our achievements and growth since K2 was founded over ten years ago. Partnering with Warburg Pincus, who has a long-standing track record of cultivating world-class businesses, reflects the hard work and strong culture of our team, loyalty of our customers, and cements our position as a leading underwriting and distribution franchise in the program insurance market,” said Bob Kimmel, CEO and co-founder of K2, an insurance industry veteran with more than 30 years of experience.

Warburg Pincus is an active investor in the insurance sector globally and has made investments in select companies such as Aeolus Re, Arch Capital, Cox Insurance Holdings, Fetch, Fortegra, Foundation Risk Partners, ICICI Lombard Insurance, Max Life, McGill & Partners, RenaissanceRe, SBI General Insurance, SCM Insurance, and Somers Re, amongst others. Founded in 1966, Warburg Pincus has raised 21 private equity and 2 real estate funds, which have invested more than $107 billion in over 1,000 companies in more than 40 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore.

Lee Equity and its principals have a long history of investing in the insurance sector, including investments in Captive Resources, McLarens, Simplicity Group, and Universal American, amongst others. Lee Equity targets equity investments of $50 million to $150 million in middle-market control buyouts and growth capital financings in companies with enterprise values of $100 million to $500 million that are located primarily in the United States.

TigerRisk Capital Markets & Advisory, J.P. Morgan and Marsh Berry & Co. acted as financial advisors, Wachtell, Lipton, Rosen & Katz served as legal counsel, Locke Lord LLP served as regulatory counsel, Ernst & Young acted as accounting advisor and Kirkland & Ellis LLP served as financing counsel to Warburg Pincus. KPMG LLP acted as accounting advisor and Ropes & Gray LLP served as legal counsel to K2 and Lee Equity. Morgan Stanley & Co. LLC acted as financial advisor to K2.

Source: K2 Insurance Services

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