KKR buying majority ownership of Sedgwick for $2.4B

New York investment firm KKR & Co. L.P. has agreed to buy a majority ownership of third-party administrator Sedgwick Claims Management Services Inc. for $2.4 billion, Sedgwick announced Monday.

KKR's interest in Sedgwick is to be acquired from the company's current investors, Stone Point Capital L.L.C. and Hellman & Friedman L.L.C., which bought Sedgwick for about $1.1 billion in 2010, Memphis-based Sedgwick said. The deal is expected to close in the first quarter of 2014.

“KKR has an exceptional record of investing in financial services companies and will be a valuable strategic resource for our organization,” Sedgwick President and CEO David A. North said in a statement. “We share a commitment to continued innovation in the claims and productivity management industry.”

“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,” said Tagar Olson, a member and head of KKR's financial services investment practice, in the statement.

Rumors of a pending sale of Sedgwick began circulating last month. Analysts who spoke about a possible deal said such sales typically are part of a standard life cycle for private equity investments.