Carlyle Group buys Hilb Group from PE firm

Private equity firm The Carlyle Group has agreed to acquire The Hilb Group LLC from Boston-based private equity firm Abry Partners LLC, the Richmond, Virginia-based brokerage Hilb said on Wednesday.

Terms of the transaction were not disclosed, but recent reports put a potential sales tag of $1 billion on Hilb, amid a continuing record pace of M&As and valuations in the insurance brokerage sector.

The deal is expected to be completed in the fourth quarter of 2019, subject to regulatory approvals.

Washington-based Carlyle Group had $223 billion of assets under management as of June 30, 2019, and has been active in M&A, becoming a majority owner in Sedgwick Claims Management Services Inc. in a transaction valued at about $6.7 billion last year.

Hilb’s existing management team and employee shareholders are expected to remain significant shareholders, Hilb said in a statement.

“Carlyle’s additional capital and resources will significantly benefit our company and associates as we grow our business organically and through targeted M&A opportunities,” Richard Spiro, CEO at Hilb, said in the statement.

Equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund that focuses on buyout transactions in the U.S., and Carlyle Global Financial Services Partners III LP, a dedicated financial services buyout fund, Hilb said.

Funds managed by Ares Capital Management LLC, Crescent Capital Group LP, Owl Rock Capital Partners LP, Antares Capital LP and Barings LLC will provide debt financing for the transaction, according to the statement.

Founded in 2009, Hilb employs more than 900 associates and operates 91 branch offices serving all 50 states.

Hilb is the 28th largest brokerage of U.S. business with $141.7 million in 2018 revenue, according to Business Insurance’s latest ranking.

Abry acquired its stake in Hilb in mid-2015 from BHMS Investments LP of New York.