White Mountains Insurance Group plans to acquire a majority equity stake in NSM Insurance Group, a specialty insurance program administrator.

The transaction values NSM at about $388 million and should close by the end of the 2018 second quarter, pending regulatory approvals and other closing conditions.

Plans call for White Mountains, a Bermuda-based insurance holding company, to fund the transaction through cash on hand and new debt issued by NSM.

NSM, based in Pennsylvania, is a specialty insurance program administrator that places more than $500 million in premiums annually through more than 6,000 brokerage firms and about 100 insurance carriers. NSM’s expertise is in specialty insurance sectors such as collector cars, nonprofit organizations, sports & wellness centers, specialty real estate and pet insurance. NSM’s deep industry knowledge and capabilities and longstanding relationships with insurance brokers and insurance carriers allow it to serve as a critical intermediary in the specialty insurance market, White Mountains said in its deal announcement.

Manning Rountree, the White Mountains CEO, said in prepared remarks that NSM “is high quality, and we believe there is tremendous opportunity to grow and expand the business.”

Growth plans with White Mountains’ new acquisition will take place both organically and through acquisitions, he said.

Geof McKernan, NSM’s CEO, said the deal “marks a new and exciting chapter of growth for NSM.”

Sources: White Mountains Insurance Group, NSM Insurance Group