KKR to invest in Sedgwick
KKR has partnered with the existing management team of Sedgwick Claims Management Services to acquire majority ownership of the claims and productivity management solutions provider for approximately USD2.4bn.
The business is being acquired from its current group of investors, which includes Hellman & Friedman and Stone Point Capital.
"We couldn't ask for a better partner in the next stage of Sedgwick's evolution," says David A 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 organisation. 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."
"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," says 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."
On an annual basis, Sedgwick handles more than 2.1 million claims and has fiduciary responsibility for claim payments totalling more than USD11bn.
The transaction is expected to close during the first quarter of 2014, subject to customary conditions and regulatory approvals.
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. Simpson Thacher & Bartlett and Latham & Watkins provided legal counsel to Sedgwick and KKR, respectively.
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