Hub sold to another private equity firm

No IPO for now as firm valued at US$4.4 billion in deal

Hub International Ltd., the world’s tenth largest insurance brokerage, announced on Monday that it will be sold by Apax Partners to funds advised by another private equity firm, Hellman & Friedman LLC.

The deal, which values Hub at approximately US$4.4 billion, brings to an end recent speculation about the timing of an initial public offering (IPO) for the company.

Read: Hub acquires Dorsey and Southeastern

Under the terms of the agreement, investment funds managed by Hellman & Friedman will hold a majority interest in the company, while members of Hub’s senior management will continue to have a significant equity position, said the company in a release. The total equity that will be retained by management was not disclosed.

Hub has more than 6,500 employees in the US (including Puerto Rico), Canada and Brazil, and expects to earn revenue of approximately US$1.2 billion in 2013, after the annualized impact of acquisitions.

Read: Hub heads to the Arctic

“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 Martin Hughes, Hub chairman and CEO in a release. “We are excited that our new partners share our commitment to investing in our people and are dedicated to working with us to deliver even greater value to our clients.”

Read: Top Brokerages roundtable discussion, with HKMB Hub’s Neil Morrison

“We have long admired Hub and are delighted to partner with Marty and the entire Hub team,” said David Tunnell, managing director of Hellman & Friedman. “Its growing market footprint and capabilities will allow it to capitalize on significant opportunities going forward. Our firm has a longstanding history of investing in insurance businesses and we look forward to working with the company to support its next phase of growth.”

IPO?
The sale to another private equity firm signals a change in direction for Hub’s finance and growth strategy. Hub had long been the subject of speculation in the industry that it would eventually go public again. In fact, chairman and CEO Martin Hughes stated as much at the Top Broker Summit in Toronto last November, responding to a question about it that an IPO would be likely within the coming year.

Read: Coverage of 2012 Top Broker Summit

Hub has made a number of acquisitions in Canada this year, including a brokerage in Nunavut. It has also expanded its footprint in Ontario, BC and Manitoba.

The transaction is expected to close before the end of 2013.

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