Lee Equity Partners to Acquire Insurance Services Provider K2
Lee Equity Partners, LLC (Lee Equity), a growth oriented middle market private equity firm, announced today that it has signed a definitive agreement to acquire a majority ownership interest in K2 Insurance Services, LLC (K2). K2 is a leading specialty insurance services holding company, which owns and controls a diverse group of managing general agents (MGAs) serving the specialty property and casualty industry.
K2’s experienced senior management team, under the leadership of Bob Kimmel, President and CEO, will continue to lead the company and will retain a meaningful equity stake in the business. As part of the transaction, K2’s specialty insurance carrier, Aegis Security Insurance Company, will be spun off and remain under the ownership of Endeavour Capital and Patrick Kilkenny.
The transaction is expected to close in the second quarter of 2019. Financial terms of the transaction were not disclosed.
Based in San Diego, California, K2 is a specialty insurance services holding company, which owns a diverse group of MGAs that underwrite and distribute specialty property and casualty insurance products. K2’s fourteen MGAs each serve a unique, niche insurance end market. In aggregate, K2’s program managers write over $650 million of specialty insurance premiums.
“Since our founding in 2011, K2 has become one of the fastest growing and largest program managers in the U.S., with a focus on generating industry leading underwriting results for our carrier partners,” said Bob Kimmel, President and CEO of K2. “With Lee Equity’s knowledge and experience investing in the insurance industry, we look forward to continuing to build on our proven track record of attracting high quality specialty underwriting teams, acquiring specialty MGAs, and growing organically. We will do this by offering our MGAs new distribution channels, technology enhancements and access to additional carrier partnerships.”
Over the course of the past eight years, K2 has made significant progress on its growth strategy, expanding its business across various specialty insurance lines while building a diverse, loyal network of distribution partners and world-class carriers and reinsurers. With its market-leading position and the support of Lee Equity, K2 will be well positioned for continued organic and acquisition driven growth.
“K2 has emerged as a market leader in the fast-growing MGA segment, and we are thrilled to partner with Bob and his team in K2’s next chapter of growth,” said Mark Gormley, a Partner at Lee Equity. “K2’s differentiated platform is well positioned to continue revolutionizing the insurance sector by leveraging technology to achieve unparalleled operational efficiencies and deliver superior underwriting performance.”
“We believe K2 will accelerate its already impressive growth trajectory as K2’s specialization, diversification, and its tech-enabled end-to-end operating platform will continue to attract top quality underwriters to join K2,” added Daniel Rodriguez, a Partner at Lee Equity.
Lee Equity has extensive investment experience in the financial services, business services and healthcare services sectors. Over the past decade, Lee Equity has invested and committed approximately $1.7 billion in more than 20 lower middle market companies and 50 add-on acquisitions.
TigerRisk Capital Markets & Advisory is acting as exclusive financial advisor to K2 for this transaction and Evercore is acting as exclusive financial advisor to Lee Equity for this transaction.
