Private equity company The Carlyle Group has agreed to acquire KKR & Co.’s majority stake in insurance company Sedgwick for about $6.7bn.
Sedgwick provides technology-enabled risk, benefits and integrated business solutions. The company has 21,000 professionals across 65 countries, offering business solutions to employers, insurance companies, brokers, policyholders and consumers globally.
The company offers a range of resources tailored to clients’ specific requirements in casualty, property, marine, benefits and other lines.
The company has fiduciary responsibility for claim payments totalling in excess of $19.5bn.
Under the deal, affiliates of funds managed by The Carlyle Group will become the majority owner of Sedgwick, which handles over 3.6 million claims on an annual basis.
The deal, which is subject to customary closing conditions, including regulatory approvals, is expected to close the deal later this year.
Funds managed by Stone Point Capital and Caisse de dépôt et placement du Québec, together with Sedgwick management, will remain minority investors in Sedgwick.
The Carlyle Group managing director and global head of healthcare Stephen Wise said: “Dave North and Sedgwick’s world-class management team have built the company into an industry leader over the last two decades.
“We are excited to collaborate with Sedgwick, which has distinguished itself by constantly improving the claims management and loss adjusting process to the benefit of all key stakeholders, including its colleagues, customers, insurance companies and brokers.”
Equity capital for the investment will be provided by Carlyle Partners VII, an $18.5 bn fund that focuses on buyout transactions in the US, and Carlyle Global Financial Services Partners III, a financial services buyout fund.
Sedgwick director and head of KKR’s financial services investing efforts Tagar Olson said: “We look forward to watching the company’s continued success in delivering high quality technology-driven insurance solutions to clients and consumers around the globe.”
The company has various wholly-owned subsidiary companies that are specialty service providers in their respective spaces.
The Carlyle Group is a global alternative asset manager with $210bn of assets under management across 335 investment vehicles.