White Mountains' Shares Surge on Bamboo Deal
White Mountains' shares surged nearly 11% after announcing a significant deal involving its subsidiary, Bamboo. The insurance giant expects substantial gains from the transaction.
White Mountains Insurance is selling a controlling interest in Bamboo, its homeowners' insurance subsidiary, to private equity firm CVC. The deal values Bamboo at $1.75 billion, with White Mountains set to receive nearly $840 million in net cash proceeds and a gain of roughly $310 million to its book value per share.
Bamboo, launched in 2018, has seen rapid growth under White Mountains' ownership. It started in California, a state prone to natural disasters, and has since expanded into Texas. Post-sale, Bamboo aims to enter the United Kingdom market. CVC's Lorne Somerville praised Bamboo's growth and recurring revenue, making it an attractive addition to CVC's US portfolio.
White Mountains will retain a 15% fully diluted equity stake in Bamboo post-closing, worth $250 million. The deal is expected to close by the end of the year, with White Mountains' shares already reacting positively to the news.
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