A group of investors led by Bernhard Capital Partners Management LP (Bernhard Capital), a services and infrastructure-focused private equity management firm, has entered into an agreement to make a significant investment in Metairie, Louisiana-based The Gray Casualty & Surety Co. (Gray Surety), a surety market affiliate of The Gray Insurance Co. (Gray Insurance).
Gray Surety, established 2003, provides surety bonds to emerging and mid-market contractors. Gray Surety partners with professional bond agents to provide responsible surety bond options across the country. The Gray Surety team also underwrites commercial bonds related to licenses, permits, and other regulatory requirements.
The companies said the investment forges a partnership to leverage combined resources of Bernhard’s construction and infrastructure expertise and Gray Surety’s strong reputation in construction insurance space.
Terms of the transaction were not disclosed. Current management will continue to operate Gray Surety.
Gray Surety has offices in Louisiana, Texas, Mississippi, Alabama, and Arizona.
Founded in 1977, The Gray Insurance Co. is a family owned, relationship-based, and service-focused insurance company admitted in 50 states. The company is headquartered in southeast Louisiana and focuses on the energy, industrial, and construction industries with an emphasis on the Gulf Coast and the southeastern United States.
Under Review by AM Best
Following the transaction announcement, ratings agency AM Best placed the credit ratings of The Gray Casualty & Surety Co. under review with developing implications. Gray Casualty currently has a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-,” AM Best said.
The under review with developing implications status reflects the execution risks associated with the company expanding its reach and scope within its stated niches and the need for AM Best to fully assess the financial and operational impacts of the partnership, including potential benefits GCSC may receive from this transaction.
AM Best will continue to hold discussions with GCSC’s management and monitor its balance sheet strength, operating performance, business profile and enterprise risk management.
The ratings will remain under review until the close of the transaction and a review by AM Best of the post-transaction details.