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KKR, pension fund to buy USI for $4.3 billion

KKR, pension fund to buy USI for $4.3 billion

Private equity firm Kohlberg Kravis Roberts & Co. L.P. and a Canadian pension fund will buy Top 10 U.S. brokerage USI Insurance Services L.L.C. for $4.3 billion, the firms announced Friday.

The purchase of the Valhalla, New York-based brokerage will shift USI’s private equity ownership once more. The brokerage, which is the ninth-largest brokerage of U.S. business, according to Business Insurance’s latest ranking, with about $1.03 billion in 2015 brokerage revenues, was bought by Onex Corp. for $2.3 billion in 2012, when it had revenues of about $660 million. 

Onex had purchased USI from Goldman Sachs Capital Partners.

A statement announcing the latest sale, said New York-based KKR and Montreal-based Caisse de dépôt et placement du Québec will be “partners with equal ownership” in USI, which has about 4,400 staff in 140 offices across the U.S.

USI has seen rapid, acquisition-fueled growth over the past several years in the midsize and small commercial sector. It’s book of business includes 43.8% commercial retail business, 42.5% employee benefits and 7.7% personal lines, according to Business Insurance research.

“We look forward to working with CDPQ to helping management achieve its long-term vision to grow the business through accelerated investments in USI’s people, technology and solutions,” said Tagar Olson, head of KKR’s financial services investing practice, in the statement.

The transaction, which includes some management ownership, is expected to close by the end of the second quarter.

The deal is the third significant deal involving Top 20 U.S. brokers announced in the past 10 days. On March 9, No. 13 brokerage AssuredPartners Inc. announced its purchase of Keenan Associates and a day later No. 20 brokerage EPIC Insurance Brokers & Consultants announced it was buying the retail operations of Capacity Group of Cos.








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