Apax Partners plans to sell Hub International to Hellman & Friedman for $4.4 billion by the end of 2013, according to a statement from Apax. The transaction is subject to final closing conditions.
Chicago-based Hub International provides property and casualty, life and health risk management services to the US, Canada and Brazil. Apax acquired the firm in 2007 for about $2 billion, or $41.50 per share, according to an earlier statement from the firm. The investment was funded from Apax's seventh Europe fund and its seventh US fund, a source familiar with the transaction told Private Equity International. Hub International produced a return multiple “north of 3x”, the source said.
After the annualised impact of the transaction, Hub International is expected to achieve annual revenue of about $1.2 billion. The company’s existing debt will be replaced with new debt financing committed by Bank of America Merrill Lynch, Morgan Stanley Senior Funding and RBC Capital Markets, according to the statement.
Hellman & Friedman will acquire a majority interest in the company, but part of Hub International’s senior management will continue to hold significant equity stakes, the statement disclosed.
“Over 15 years, Hub has established itself as a market-leading insurance broker with a clear focus on customer success and growth. Its growing market footprint and capabilities will allow it to capitalise on significant opportunities going forward,” David Tunnell, managing director of Hellman & Friedman, said in the statement.
During its ownership, Apax helped Hub International expand in the Canadian marketplace and allowed it to enter Sao Paulo, Brazil. Since 2001, Apax has invested about $2.7 billion in the financial and business services sector, including investments in Israel’s largest asset manager Psagot, according to the firm.
Apax’s most recent portfolio exit was last December when it sold LR Health & Beauty Systems to a consortium of private equity firms including Bregal Capital and Quadriga Capital, according to its website. Financial terms of the transaction were not disclosed.
In June, Apax closed its most recent investment vehicle on $7.5 billion. The fund’s original target was $11.9 billion. Apax committed about €450 million ($596 million, £388 million) to the fundraise, PEI previously wrote.