GS Capital in $1.4bn insurance deal

Shareholders of USI Holdings Corporation will receive $17 in cash per share.

GS Capital Partners, the private equity unit of US bank Goldman Sachs, is buying USI Holdings Corporation, a US insurance and financial products distributor, for about $1.4 billion including debt, the company said.

The shareholders will receive $17 in cash per share. This is 20.5 percent more than the average closing share price for the month before October 24, 2006, the day USI said it was considering its financial options.

USI Holdings was founded in 1994 and trades on the US growth market NASDAQ. The company distributes property and casualty insurance, as well as financial services like employee benefits outsourcing. It has nearly 70 offices located in 19 states.

The deal is expected to close in the second quarter of 2007.

Goldman Sachs established GS Capital Partners in 1991. It is currently investing with its fifth fund, GS Capital Partners V, valued at approximately $8.5 billion.

The firm joined buyout rivals Kelso and Company, ValueAct Capital and Parthenon Capital to take private ADESA, a US used vehicle financing company earlier this month. That deal was worth approximately $2.5 billion.