Edgewater Growth Capital Partners III, L.P. (“Edgewater”) is pleased to announce its recent investment in State National Companies, Inc. (“State National” or the “Company”). State National is a forty year old specialty insurance business based in Bedford, Texas with 390 employees. State National is a leading provider of services to specialty general agents and collateralized lenders through its Program Services and Lender Services lines of business. Edgewater is backing Terry Ledbetter, a highly respected industry veteran who has led the Company since its founding in 1973.

State National’s Program Services segment leverages the Company’s A.M. Best “A” rating and expansive insurance licenses to its customers in exchange for a ceding fee. Rather than take on underwriting risk which is the typical practice in the insurance industry, the Company cedes most underwriting exposure to reinsurance providers. Over the last 25 years, the Company has ceded $10 billion of insurance premiums with no losses. The Lender Services segment specializes in providing collateral protection insurance (“CPI”) to lenders, primarily credit unions, who make automobile loans. Positive trends in the CPI market are driven by growth in the lenders’ portfolios from rising auto sales, higher average loan sizes and increasing credit availability.

State National represents a compelling opportunity to back a seasoned management team with a differentiated business model and strong track record.