Palomar Holdings Expands Portfolio with Gray Surety Acquisition
Palomar Holdings to Acquire Gray Surety
Palomar Holdings, Inc. (NASDAQ: PLMR) has revealed an exciting development in its growth strategy with the announcement of its agreement to acquire The Gray Casualty & Surety Company. This significant acquisition, valued at $300 million, will be funded in cash and is set to bring remarkable benefits to Palomar's operational capabilities. The deal is currently awaiting regulatory approvals and is projected to finalize in the first half of 2026.
Enhancing Market Position
Gray Surety is recognized as a premier surety carrier that specializes in providing contract bonds to midsized and emerging contractors throughout the United States. With a strong national presence and a team of experienced professionals, this acquisition aligns perfectly with Palomar's strategic ambitions. The leadership at Gray Surety has shown strong capability in managing a robust operation, which operates across all states through its thirteen regional offices.
Leadership Insights
Mac Armstrong, CEO and Chairman of Palomar, expressed enthusiasm regarding the acquisition, emphasizing Gray Surety's esteemed position in the industry. Armstrong stated that this move significantly improves Palomar's surety business strategy, enhancing its market footprint and creating synergies with its existing operations. The integration of innovative talents from Gray Surety is anticipated to propel Palomar's strategic initiatives forward.
Partnership with Gray Surety
Cullen Piske, the President of Gray Surety, shared his excitement about joining forces with Palomar. He highlighted that both companies share a commitment to an entrepreneurial spirit and disciplined underwriting. Partnering with Palomar will provide Gray Surety the financial backing and resources necessary to expand its operations, enabling a deeper relationship with agency partners and enhancing service delivery.
The Role of Advisors
To facilitate this strategic move, Evercore is acting as the exclusive financial advisor for Palomar, while DLA Piper LLP (US) provides legal counsel. Meanwhile, for Gray Surety, J.P. Morgan is serving as the exclusive financial advisor and Kirkland & Ellis LLP offers legal support throughout the transaction.
About Palomar Holdings
With a diverse portfolio of services, Palomar Holdings, Inc. stands out as a leader in the specialty insurance sector. The company provides a wide array of insurance products through subsidiaries like Palomar Specialty Insurance Company and Palomar Specialty Reinsurance Company. Palomar has established itself as an innovative player in the market, focusing on areas such as earthquake, casualty, and crop insurance. Their robust financial strength is evidenced by high ratings from industry analysts, signifying a strong foundation for continued growth.
About The Gray Casualty & Surety Company
The Gray Casualty & Surety Company, established in 1996, is dedicated to offering contract surety solutions to midsized and emerging contractors. Under Bernhard Capital Partners' guidance, Gray Surety has enjoyed impressive growth while maintaining exemplary operational standards, operating across all 50 states with maintaining a competitive edge in the market.
Frequently Asked Questions
What is the significance of Palomar's acquisition of Gray Surety?
This acquisition will enhance Palomar's surety business, expanding its market presence and operational capacities.
How much is the acquisition valued at?
The acquisition is valued at $300 million, which will be paid in cash, subject to adjustments.
When is the acquisition expected to close?
The transaction is expected to close in the first half of 2026, pending regulatory approvals.
Who are the key players involved in the transaction?
Mac Armstrong is the CEO of Palomar, while Cullen Piske leads Gray Surety.
What services does Palomar Holdings provide?
Palomar offers a range of specialty insurance services, including earthquake, casualty, and crop insurance, among others.
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