Global investment firm KKR (Kohlberg Kravis Roberts), and Canadian Caisse de dépôt et placement du Québec (CDPQ), a long-term institutional investor, have announced their joint acquisition of USI Insurance Services (USI), a U.S. insurance brokerage and consulting firm.
As partners with equal ownership, KKR and CDPQ along with USI employees, will acquire USI from Onex Corporation and its affiliates in a transaction that values USI at US$4.3 billion with debt.
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USI has become an industry leader by leveraging the USI ONE Advantage and attracting best-in-class industry talent with a long history of deep and continuing investment in local communities. USI annual revenue of more the US$1 Billion
With more than 4,400 professionals operating out of 140 local offices throughout the United States, USI delivers property and casualty, employee benefits, personal risk and retirement solutions.
The investment will primarily be made through KKR and CDPQ’s core private equity partnership which includes funds from KKR’s balance sheet and from CDPQ’s pool of capital. The partnership is designed to pursue attractive investment opportunities in high quality businesses with a longer duration and a lower risk profile in order to support strong management teams and facilitate long-term strategic business building.
KKR and CDPQ have a track-record in the financial services and insurance -related sectors and have been long-standing partners in multiple investments over the years.
KKR manages investments across multiple asset including private equity, infrastructure, real estate, energy, credit and hedge funds. It aims to generate investment returns by following a disciplined investment approach and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business.
CDPQ manages funds primarily for public and parapublic pension and insurance plans. It invests globally in major financial markets, private equity, infrastructure and real estate.
“USI is a fantastic company and is uniquely positioned to help address the risk management, insurance and employee benefits-related needs of small and medium-sized business owners. We look forward to working with CDPQ in helping management achieve its long-term vision to grow the business through accelerated investments in USI’s people, technology and solutions,” said Tagar Olson, Head of KKR’s Financial Services investing practice.”
“CDPQ and KKR are co-leading this investment and leveraging their respective expertise in the sector to support USI’s world-class management as it pursues its strategic plan for long-term growth. Our partnership was established to implement both firms’ patient, disciplined and collaborative investment approach,” said Christian Puscasiu, Co-Head, Direct Investments, Private Equity at CDPQ. “USI operates in a resilient sector characterized by stable, long-term returns and serves small and medium-sized businesses, which are the cornerstone of the U.S. economy.”
“We are passionately committed to continuing and accelerating USI’s growth and investment as a leader in our industry, leveraging and innovating our unique USI ONE Advantage,” commented Michael J. Sicard, Chairman & CEO of USI.
The transaction is anticipated to close by the end of the second quarter 2017 subject to customary conditions including regulatory approvals.
Source: KKR, CDPQ and USI