White Mountains Insurance Group (NYSE:WTM) shares traded higher on Friday after the company announced plans to sell a controlling interest in Bamboo, its technology-driven homeowners’ insurance distribution platform, to funds advised by CVC Capital Partners.
The deal values Bamboo at $1.75 billion. Operating in California and Texas, Bamboo specializes in data-enabled underwriting and distribution for the residential property market.
White Mountains Insurance said the deal is expected to add about $310 to its book value per share and generate roughly $840 million in net cash proceeds.
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Post-closing, White Mountains will retain a 15% fully diluted equity stake in Bamboo, valued at around $250 million.
The transaction is expected to close by the end of the fourth quarter of 2025, subject to regulatory approvals and customary conditions. White Mountains noted the deal is not contingent on financing.
Manning Rountree, Chief Executive Officer of White Mountains, said, “It has been our privilege to partner with Bamboo. Its rapid growth is a testament to the value and innovation it is bringing to the homeowners’ insurance market.”
“Bamboo is a one of a kind asset, deploying differentiated technology, speed and underwriting to serve the insurance needs of homeowners in California and Texas,” said Daniel Brand, Partner at CVC.
In August, the company reported second-quarter earnings of $47.75 per share. This is a 324.81% increase over losses of $(21.24) per share from the same period last year. The company reported $689.20 million in sales this quarter. This is a 74.30% increase over sales of $395.40 million in the same period last year.
White Mountains Insurance had cash of $162.7 million at the end of the second quarter.
John Chu, Chief Executive Officer of Bamboo, said, “This milestone represents the result of years of dedication and hard work by the entire Bamboo team and was only achieved with the support and confidence of our valued partners”.
Price Action: WTM shares were trading higher by 5.13% to $1750.01 premarket at last check Friday.
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