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| | Sedgwick Announces New Majority Ownership by KKR
By Lonce LaMon - January 27, 2014
Sedgwick announced today that KKR, together with management, have signed an agreement to acquire the majority ownership of Sedgwick for approximately $2.4 billion from its current group of investors. That group includes Hellman, Friedman LLC and Stone Point Capital, LLC.
On an annual basis, Sedgwick handles more that 2.1 million claims and has fiduciary responsibility for claim payments totaling more than $11 billion.
The transaction is expected to close during the first quarter of 2014, subject to customary conditions and regulatory approvals.
“We couldn’t ask for a better partner in the next stage of Sedgwick’s evolution,” said David A. North, president and CEO of Sedgwick. “KKR has an exceptional record of investing in financial services companies and will be a valuable strategic resource for our organization. We share a commitment to continued innovation in the claims and productivity management industry. My colleagues and I look forward to collaborating and KKR as we develop solutions for the changing needs of our clients.”
David A. North, Sedgwick President and CEO in 2013.
Founded in 1976, and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $90.2 billion in assets under management as of September 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes.
“This is a critical time for employers as they adjust to an evolving health care delivery model, the shifting demographics of the workforce and a multitude of additional challenges,” said Tagar Olson, Member of KKR and head of it financial services investment practice. “Sedgwick has an exceptional management team, a strong track record of innovation and the technology-driven solutions to address these challenges. We believe our partnership will enable them to maintain and enhance their leadership position in the industry.”
Equity for the investment was provided principally by KKR’s North American Xi private equity fund. UBS Securities LLC, Deutsche Bank Securities, Morgan Stanly, Mizuho, KKR Capital Markets, LLC and MCS Capital Markets LLC provided financing for the transaction. Simpson, Thacher & Bartlett LLP and Lantam & Watkins LLP provided legal counsel to Sedgwick and KKR, respectively.
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