Private equity investment firm Hellman & Friedman has agreed to purchase the US-based insurance brokerage firm Hub International from Apax Partners in London, in a deal valued at nearly $4.4bn.
It is believed that Apax, a private equity firm, will get a profit of over three times against its investment made in Hub International at the time of acquisition during 2007.
Based on 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.
The acquired insurance brokerage firm employs over 6,500 staff in the US, including Puerto Rico, Canada and Brazil, and it is likely that the company will post revenue of nearly $1.2bn for 2013, after the annualized impact of acquisitions.
Hub chairman and CEO Martin Hughes said, "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."
Pending receipt of the concerned regulators and satisfying customary closing conditions, the transaction is likely to conclude before the end of 2013.
For the transaction amount, a loan will be taken from BofA Merrill Lynch, Morgan Stanley Senior Funding and RBC Capital Markets.
BofA Merrill Lynch, Morgan Stanley & Co and Stephens have been hired to offer financial advice to Hub and Apax.