KKR has signed an agreement to acquire Sedgwick Claims Management Services, a provider of claims and productivity management services, for approximately $2.4 billion from its current group of investors, which includes Hellman & Friedman and Stone Point Capital. The transaction is expected to close during the first quarter of 2014.
“We couldn’t ask for a better partner in the next stage of Sedgwick’s evolution,” said David 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 with KKR as we develop solutions for the changing needs of our clients.”
Sedgwick Claims Management Services is a provider of technology-enabled claims and productivity management services. The company specializes in workers’ compensation; disability, family medical, and other employee absence; managed care; general, automobile, and professional liability; warranty and credit card claims services; fraud and investigation; structured settlements; and Medicare compliance. On an annual basis, Sedgwick handles more than 2.1 million claims and has fiduciary responsibility for claim payments totaling more than $11 billion. Sedgwick and its affiliated companies have more than 11,000 colleagues in some 200 offices located in the US and Canada. The company is headquartered in Memphis (www.sedgwick.com).
“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 its 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.”
KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $90 billion in assets under management. KKR was founded in 1976 and in addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).
Equity for the investment was provided principally by KKR’s North American XI private equity fund. UBS Securities, Deutsche Bank Securities, Morgan Stanley, Mizuho, KKR Capital Markets and MCS Capital Markets provided financing for the transaction.
Hellman & Friedman invests from $200 million to $750 million in companies across a range of industries including energy & industrials, software, business & marketing services, internet & digital media, financial services, insurance, media, and healthcare. Founded in 1984, the firm has raised and managed over $25 billion of committed capital and invested in over 60 companies. The firm is currently investing its sixth fund, with $8.4 billion of capital commitments. Hellman & Friedman is based in San Francisco with additional offices in London and New York (www.hf.com).
Stone Point Capital serves as the manager of the Trident Funds, which have raised more than $10 billion in committed capital to make investments in the insurance, employee benefits and financial services industries. The firm is located in Greenwich, CT (www.stonepoint.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 1-27-14