Funds managed by The Carlyle Group are to acquire a controlling equity stake in Edgewood Partners Insurance Center (EPIC), a retail insurance broker headquartered in California.
Carlyle's investment will enable EPIC to continue to execute its organic growth strategy and support strategic acquisitions of complementary insurance distribution platforms throughout the US.
Founded in July 2007 by John Hahn and Dan Francis, in partnership with funds managed by Stone Point Capital, EPIC has approximately USD80m in annual revenues. The company has developed a broad suite of capabilities for commercial lines and employee benefits placements as well as specialised placement capabilities for the real estate, hospitality, construction, renewable energy and other industries.
Hahn says: "Over the past six years, we have worked hard to build EPIC into a unique firm that is focused on providing innovative solutions for our clients. We have done so by creating a culture of accountability and alignment through our broad-based employee ownership. With the financial backing of Carlyle, we can build on the strength of our California-based organisation. We can continue to execute our strategy of acquiring businesses and hiring proven teams that bring a strong client base as well as specialised placement capabilities to our company. We look forward to working with our new partners at Carlyle, our existing partners at Stone Point and our dedicated employees, many of whom are shareholders in our business."
Olivier Sarkozy (pictured), Carlyle managing director and head of global financial services, says: "We are delighted to be partnering with John Hahn, a proven industry leader, to continue to support EPIC's strong record of growth and innovation in the insurance brokerage industry. We are particularly gratified that John and his management team, as well as his original backers, Stone Point Capital, have agreed to join us in this new and exciting stage of EPIC's evolution."
Charles A Davis, the chief executive of Stone Point, says: "John and Dan and the entire EPIC team have done a terrific job over the past six years building the EPIC franchise into a leading insurance broker. What was conceived as a business plan in 2007 has become one of the fastest growing brokers in the U.S. We have a very high regard for Carlyle, having worked with them before. We believe they will be a great partner as EPIC takes its business to the next level."
Terms of the investment, which is subject to customary regulatory approvals and is expected to close at year-end, were not disclosed. Equity for the investment will be provided by Carlyle Global Financial Services Partners and Carlyle Global Financial Services Partners II.
Post closing, funds managed by Stone Point and EPIC employees, including founders Hahn and Francis, will remain substantial investors in the company.
EPIC was advised throughout the transaction by Bank of America Merrill Lynch (financial advisor) and by Kramer Levin Naftalis & Frankel (legal counsel). The Carlyle Group was advised by Sandler O'Neill & Partners (financial advisor) and by Wachtell, Lipton, Rosen & Katz (legal counsel).
