Palomar (PLMR) M&A announcement summary

Deal rationale and strategic fit

• Acquisition supports the goal to double adjusted net income and achieve over 20% adjusted ROE in the intermediate term.

• Expands presence in the attractive surety market, which has seen 13% CAGR since 2021.

• Enhances business diversification with limited correlation to existing lines and broader P&C market.

• Provides access to all 50 state licenses and increases T-listing to $13m.

• Builds on prior acquisitions, strengthening financial position and strategic capabilities.

Financial terms and conditions

• $300 million all-cash acquisition for 100% of Gray Surety's equity interests.

• Funded through a combination of cash and debt.

• Subject to customary closing adjustments.

Synergies and expected cost savings

• Operating efficiencies expected across back-office functions.

• Most expense synergies realized shortly after closing, with 100% within 12 months.

• Synergies anticipated to provide upside to adjusted EPS.