Palomar Holdings has completed its acquisition of Gray Surety for approximately $311 million, a Treasury-listed surety carrier focused on contract bonds for mid-sized and emerging contractors, with licenses in all 50 states and 13 regional offices. The acquisition is a key part of Palomar's diversification and growth strategy, contributing $33.6 million in revenue for the six months ended June 30, 2026, and driving a 235.6% year-over-year increase in Surety & Credit GWP to $39.2 million in the second quarter of 2026. Integration is substantially complete, allowing Palomar to focus on franchise building, including adding underwriting talent, geographic expansion, and new product capabilities. Management views the acquisition as a driver of scale and earnings within its strategy to double adjusted net income over three to five years while maintaining adjusted ROE above 20%. In related industry moves, Aon agreed to acquire USI from KKR for $17 billion to expand U.S. middle-market and E&S capabilities, and Arthur J. Gallagher's Risk Placement Services acquired Kansas-based Med James in July 2026. Palomar's shares have gained 10.7% in the past year, and the stock trades at a forward price-to-book of 3.62X, above the industry average of 1.42X. The Zacks Consensus Estimate for third-quarter 2026 EPS has moved down 2.5%, while fourth-quarter 2026 EPS estimates have moved up 5.1% in the past 60 days, and full-year 2026 and 2027 EPS estimates have moved up 2.8% and 2.7%, respectively. PLMR currently carries a Zacks Rank #2 (Buy).
Palomar Holdings IncPalomar completed its $311M Gray Surety acquisition, a key part of its diversification and growth strategy driving scale and earnings.
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