K2 Insurance Services, a leading independent specialty insurance program manager, today announced that Warburg Pincus, a leading global growth investor, has agreed to acquire the company from Lee Equity Partners, LLC a growth oriented middle market private equity firm. The investment will support K2’s continued growth strategy, 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.
K2 has a diversified portfolio of 24 specialized programs across four key segments: Specialty Commercial, Specialty Transportation, International, and Personal Lines. K2 provides centralized services to managing general agents (MGAs), including distribution and capacity relationships, technology, actuarial, claims, and additional back-office support. K2 is led by CEO and Co-Founder Bob Kimmel, an insurance industry veteran with more than 30 years of experience.
“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, K2. “We would also like to thank Lee Equity for their tremendous partnership and support over the past three years.”
“K2 is truly a differentiated platform, offering a full suite of services to a diversified portfolio of programs that are supported by deep carrier relationships. K2’s management team has extensive industry experience and a demonstrated track record of growing insurance businesses,” said Michael Martin, Managing Director, Head of Financial Services, Warburg Pincus. “As a long-term investor in the insurance sector, we believe K2 has significant growth potential and are excited to partner with Bob and the K2 team to build upon the company’s history of success and expand their offerings in this dynamic and growing market,” added Jeff Stein, Managing Director, Warburg Pincus.
“We are very proud of K2’s tremendous growth during our partnership and would like to thank Bob and the broader management team for the opportunity to partner with them and for their tireless effort that catalyzed the company’s success,” said Danny Rodriquez, Partner, Head of Financial Services, Lee Equity. “Amongst the many insurance businesses that I have had the opportunity to work with, I can confidently say that the quality of K2’s team and platform differentiates it amongst its peers to the benefit of its carrier partners, distributors, and broader stakeholder base. We’ll continue to eagerly follow the company’s success through this next stage,” added Mark Gormley, Partner, Lee Equity.
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.
Lee Equity and its principals have a long track record of investing in the insurance sector, including investments in Captive Resources, McLarens, Simplicity Group, and Universal American, amongst others.
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.
K2 Insurance Services is an insurance services holding company, which owns and controls a diverse set of specialty program administrators. 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. K2 is headquartered in San Diego, California and is a privately held company.
Warburg Pincus LLC is a leading global growth investor. The firm has more than $85 billion in assets under management. The firm’s active portfolio of more than 255 companies is highly diversified by stage, sector, and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. 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. For more information, please visit www.warburgpincus.com. Follow us on LinkedIn.
Lee Equity Partners, LLC is a New York-based private equity firm that partners with management teams to build companies with strong growth potential. 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. The firm invests in a range of industries where the team has deep relationships developed over decades, including business services, financial services, and healthcare services. Additional information is available at www.leeequity.com.