American Family to buy remaining stake in specialty insurer Bowhead in $1.2 billion deal

Adds details throughout

Aug 3 (Reuters) - American Family Mutual Insurance Company will buy the remaining stake it does not already own in Bowhead Specialty BOW.N in an all-cash deal, valuing the specialty insurer at $1.2 billion.

Here are some other details:

• Bowhead shareholders will receive $34 per share in cash for each share held, representing an 11% premium to the stock's last close, the firm said on Monday.

• Shares of New York-based Bowhead jumped 9.5% in premarket trading. The stock has risen 7% for the year through the last close.

• The two firms have a long-standing relationship, with American Family making a founding investment in Bowhead in 2020.

• "Bowhead's capabilities complement American Family's strategy to diversify its commercial portfolio, broaden product offerings," American Family CEO Bill Westrate said.

• Bowhead, whose name is inspired by bowhead whales - the longest-living mammals on earth - went public in New York in 2024 after an initial public offering at $17 per share.

• American Family, a minority stockholder in Bowhead, will fund the purchase through cash and other liquid investments on hand. The transaction is targeted to close prior to the end of 2026.

• Bowhead, which provides casualty, professional liability and healthcare liability insurance products, will operate as a standalone entity within the American Family platform and industry veteran Stephen Sills will remain the CEO.

• Ardea Partners served as exclusive financial adviser to Bowhead.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore)

((ArasuKannagi.Basil@thomsonreuters.com;))