Hub International Limited (HUB) said it has entered into an agreement with private equity firm Leonard Green & Partners (LGP) for an expected “substantial” minority investment with HUB’s enterprise valuation of $23 billion.
The valuation is the largest for a private insurance broker, HUB said, adding that it expects to explore bringing on additional minority investors in the coming months.
Chicago-based HUB said its valuation has grown from $4.4 billion when Hellman & Friedman (H&F) initially invested in the broker, to $10 billion in 2018 with a minority investment from Altas Partners, to its current valuation with $3.7 billion in annual in 2022.
The proceeds of the investments will be used to repurchase equity interests from existing equity holders, HUB said. H&F will retain a controlling-interest in HUB, while the company’s management team will continue to hold a significant equity position. Additionally, Altas will remain a significant minority shareholder and continue to be members of the board. LGP will be joining the board.
“We have admired HUB for a long time and are excited to partner with the entire HUB management team, Hellman & Friedman, and Altas to support the next phase of the company’s growth. HUB is the premier insurance broker and has all the attributes we look for in investments – a best-in-class management team, a differentiated culture, a long and consistent track record of success, and multiple ways to grow,” said Adam Levyn, partner at Los Angeles-based LGP.
The transaction is expected to close in the third quarter pending customary closing conditions and regulatory approvals.
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