Bermudian-based White Mountains Insurance Group Ltd will receive an $85 million cash payment as the result of a deal involving a company in which it owned a majority stake.

MediaAlpha has signed a definitive agreement to sell a significant minority stake to Insignia Capital Group in connection with a recapitalisation transaction. The transaction values MediaAlpha at approximately $350 million.

White Mountains will remain a significant equity holder in MediaAlpha going forward with a 42 per cent ownership interest on a fully diluted basis.

MediaAlpha’s founding managers will continue to lead the business, and each will remain a significant equity holder.

MediaAlpha is an advertising technology company that has developed distinctive platform solutions for auto, motorcycle, home, renter, health and life insurance.

White Mountains said the $85 million payment it would receive would result in a gain of about $55 to the insurance group’s book value per share.

Manning Rountree, chief executive officer of White Mountains, said: “This transaction is an important milestone for MediaAlpha. It recognises the significant value that the MediaAlpha team have created to date, and it sets the stage for further value creation going forward.

“We are excited to welcome Insignia Capital as our new institutional investment partner. The Insignia team has a proven track record of investing in high-growth marketing technology businesses, and their strategic and operational guidance will be highly valuable.”

The transaction is expected to close within 60 days. It is subject to the satisfaction of customary closing conditions and MediaAlpha securing new third-party debt financing of approximately $100 million, the proceeds from which will be used to effect a dividend recapitalisation.