BCP Completes Sale of The Gray Casualty & Surety Company

BCP has successfully finalized the sale of The Gray Casualty & Surety Company ("Gray Surety") to Palomar Holdings, Inc. (NASDAQ: PLMR), marking a significant milestone in its investment strategy. The transaction was announced on February 2, 2026, after BCP's initial investment in Gray Surety in 2021. Gray Surety, a Treasury-listed surety carrier, specializes in providing contract bonds to midsized and emerging contractors across the U.S. The company operates from 13 regional offices and is licensed in all 50 states.

Under BCP's stewardship, Gray Surety experienced considerable growth, substantially increasing its national presence and enhancing its reputation as a reliable surety partner. Jeff Koonce, a partner at BCP, expressed satisfaction regarding the completion of the sale, noting the company's remarkable growth trajectory since BCP’s involvement. Cullen Piske, President of Gray Surety, acknowledged BCP's pivotal role in scaling the company and expressed optimism about future growth with Palomar.

BCP’s sale of Gray Surety is part of a broader trend of exits for the firm, which has announced several divestitures in the latter half of 2025, including the sale of Brown & Root Industrial Services and an anticipated exit with United Utility. BCP, established in 2013 and managing $6 billion in assets across various strategies, aims to create sustainable value by leveraging its experience in the services and infrastructure sector.

The financial advisement for the transaction was handled by J.P. Morgan for Gray Surety, while Evercore advised Palomar. Legal counsel was provided by Kirkland & Ellis LLP for Gray Surety and DLA Piper LLP (US) for Palomar. Additional details related to the acquisition can be accessed via Form 8-K filed with the U.S. Securities and Exchange Commission.

The recent sale of The Gray Casualty & Surety Company by BCP to Palomar Holdings, Inc. signals a significant moment in the surety bond industry, particularly amidst the broader market dynamics impacting contractor services. Investors and market participants should carefully assess the implications of this strategic divestiture.

BCP's successful exit is indicative of the value creation that can be achieved through focused management and operational support. Gray Surety, which has transformed into a Top 50 surety carrier since BCP's acquisition in 2021, showcases the potential for growth within the niche of contract bonds for midsized and emerging contractors. This targeted sector often faces less competition compared to larger firms, allowing for higher margins and specialized expertise. Consequently, Palomar's acquisition could lead to stronger market positioning by leveraging Gray's established national footprint and reputation among contractors.

For Palomar, this transaction is an opportunity to enhance its portfolio, particularly as demand for surety bonds remains resilient due to ongoing infrastructure projects and the need for contract security in public and private sectors. Investors should note Palomar's strategy to build upon Gray's momentum, which could translate into robust revenue growth and market share expansion.

From an investment standpoint, continuous monitoring of Palomar's performance post-acquisition will be crucial. Market participants should also keep an eye on the broader economic indicators affecting construction and infrastructure spending, as these will directly influence the demand for surety bonds.

In summary, the completion of this sale marks a pivotal point for both BCP and Palomar. Investors should view this development as an opportunity to reevaluate stakes in companies focused on the surety bond market, as well as those positioned to capitalize on the ongoing growth in construction-related services.