Private Equity News & Analysis

CVC buys insurance giant from Stone Point

The firm will purchase insurance services company Cunningham Lindsey in a deal valued at between $900m and $1bn.

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An investor group led by CVC Capital Partners will purchase insurance services company Cunningham Lindsey from Stone Point Capital and Canadian financial services company Fairfax Financial, according to a statement.

Terms of the transaction were not disclosed, but a source close to the situation said the deal was valued between $900 million and $1 billion, including the assumption of debt.

Cunningham Lindsey provides loss adjusting and claims management services as well as engineering consultancy, risk management and environmental consultancy services. Fairfax will sell its stake in the business for $260 million, a seperate statement said, and will invest up to $35 million of the proceeds to remain a minority owner. Stone Point, which acquired a majority interest in Cunningham Lindsey from Fairfax in a 2007 take-private, will also retain a stake in the company following completion of the deal.

CVC will invest from its €11 billion European Equity Partners V fund that closed in early 2009. The firm is currently in market with Fund VI, which is targeting €11 billion, according to data provider PrivateEquityConnect.

CVC was unavailable for comment at press time. The firm’s most recent investment in the US came in April when it recapitalised business advisory firm AlixPartners.

CVC’s global financial institutions group focuses on investing in financial businesses in North America, Europe and Asia. In 2007, the group completed the £6.15 billion (€7.69 billion; $9.93 billion) merger of UK businesses Saga and the Auto Association to create Acromas Holdings, a financial, motoring and travel services business. More recently, CVC took international insurance and reinsurance group Brit Insurance private alongside Apollo Global Management in 2010.

Last month, CVC firm sold a 10 percent stake in itself to Singaporean sovereign wealth fund GIC, the Kuwait Investment Authority and a third unnamed Asian fund.

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