Transaction Overview

VERO BEACH, Fla. (October 1, 2014) – Orchid Underwriters (“Orchid”), a leading specialty underwriter of property insurance focusing on coastal properties, announced that Gryphon Investors (“Gryphon”), a San Francisco-based middle market private equity firm, has entered into a definitive agreement to make a majority investment in the company. CEO Michael Ray and President Brad Emmons have retained a significant ownership position in the company and will continue to lead Orchid after the closing of the transaction. Terms of the deal were not disclosed.

Based in Vero Beach, FL, Orchid is a specialty underwriter of personal and commercial property risks with expertise in high value properties in Tier 1 and 2 coastal regions throughout the United States and the Caribbean. The company provides customers with a “one-stop-shop” product offering delivered through an easy-to-use automated policy issuance system. Orchid only represents well-known A.M. Best A-rated insurance carriers and is a market leader with over $14 billion of insurance in-force.

“Having been an owner of Orchid since its early years, I am excited to help steward the Company into a new era of strategic growth opportunities including new product development and geographic expansion,” said Orchid President Brad Emmons. “Through this new partnership with Gryphon, Orchid is seeking to differentiate itself further as an underwriting organization, thereby creating greater value for its retail partners and delivering exceptional results to all of our trading partners.”

CEO Michael Ray added, “In addition to financial resources, Gryphon provides Orchid with a highly experienced team of advisors and operations experts, and we look forward to leveraging their insurance industry relationships to support the company’s growth initiatives.”

Ken LeStrange, an advisor to Gryphon, commented, “Michael, Brad and the rest of the Orchid team have built a great franchise with an impressive value proposition for insureds, agents and carriers. I am excited to have the opportunity to work with them along with the Gryphon team to expand the company’s product lines and geographic reach.” LeStrange, who was a co-founder and former Chairman & CEO of Endurance Specialty as well as the former CEO of Aon Risk Services, will become Chairman of Orchid after the closing of the transaction.

Sherman & Company acted as financial advisor to Gryphon and Sandler O’Neill + Partners, L.P. acted as financial advisor to Orchid on the transaction.

About Orchid Underwriters

Founded in 1998 and based in Vero Beach, FL, Orchid Underwriters specializes in providing specialty insurance products for homeowners and other difficult-to-insure properties throughout the United States and the Caribbean. The Company’s comprehensive product offering provides customers with a “one-stop-shop” for homeowners and condominium property insurance, including umbrella policies, wind and wind only, general and excess flood, earthquake, builder’s risk and others. Orchid only represents well-known A.M. Best A-rated insurance carriers and is a market leader with over $14 billion of insurance in-force.

About Gryphon Investors

Based in San Francisco, Gryphon Investors (www.gryphoninvestors.com) focuses on leveraged acquisitions of, and growth investments in, middle-market companies in partnership with experienced management. With more than $1.4 billion of cumulative equity commitments, Gryphon has an extensive track record of investing up to $100 million of tis committed capital per investment in companies with sales ranging from approximately $50 to $500 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, professional resources and operational expertise.