Insurance firm Hub bought by private equity

INSURANCE broker Hub International will be sold to funds managed by private equity firm Hellman & Friedman in a deal that values the firm at about $4.4bn (£2.87bn), Hub said yesterday.

Hub, which has more than 6,500 employees in the United States, Canada and Brazil, was formed through the merger of 11 privately held Canadian insurance brokerages in 1998. The company has 250 offices throughout the United States and has its headquarters in Chicago.

Hub said in a statement that it expected to post revenue of about $1.2bn in 2013, after the annualised impact of its own recent acquisitions.

Buyout firm Apax Partners and Morgan Stanley’s private equity arm spent months exploring the sale of Hub after taking it private six years ago for about $1.8bn, including $145m of debt.

Investment funds managed by Hellman & Friedman will hold a majority interest in company after the deal completes towards the end of this year, while members of Hub’s senior management would continue to have a significant equity position, the company said.
It did not specify the size of the stakes to be held.

“Partnering with Hellman & Friedman will enable us to build upon our current strategy of enhancing our product and service capabilities and expanding our geographic footprint,” said Hub’s chairman and chief executive Martin Hughes in a statement yesterday.

Bank of America Merrill Lynch, Morgan Stanley and Stephens are providing financial advice to Hub and Apax.

The company’s existing debt arrangements will be replaced by new debt financing provided by BofA Merrill Lynch, Morgan Stanley and RBC Capital Markets.