HPS Investment Partners is to take a substantial minority investment in insurance broker NFP.
Upon the closing of the transaction, Madison Dearborn Partners (MDP), a private equity firm that took a control equity ownership position in NFP in 2013, will maintain a controlling stake in NFP, alongside NFP’s management and employees.
The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2017. Terms were not disclosed.
“HPS’s investment in NFP is a further validation of the quality, performance and future opportunity of our business,” says NFP chairman and chief executive officer Douglas Hammond. “Partnering with these two outstanding investors provides us with tremendous intellectual and capital flexibility to further advance our growth initiatives and solidify our position as a world-class, diversified insurance brokerage and consulting leader. With the support of MDP and HPS, we will continue building on our momentum by investing in client-centric resources to create best-in-class products and services, while also supporting our PeopleFirst initiative, which creates an outstanding professional environment for our valuable employees.”
The partnership with MDP and HPS provides substantial capital resources to support NFP’s growth. Hammond will continue to serve as chairman and chief executive officer of NFP and will remain the company’s largest individual shareholder.
Scot French, partner at HPS, says: “We are pleased to join MDP as an investor in NFP and to work alongside the company’s experienced and talented management team. We are looking forward to partnering with MDP and NFP to support the company’s growth over the long term.”
Vahe Dombalagian, a managing director at MDP and head of the firm’s financial and transaction services team, says: “We have an excellent working relationship with HPS, and we are pleased to have them join MDP as our partner in NFP. Together, we will use our combined expertise and resources in partnership with NFP’s outstanding leadership team to support NFP’s growth and build a strong, diversified business as we execute on our long-term vision for the company.”
BofA Merrill Lynch is serving as the exclusive financial adviser to NFP. Barclays is serving as exclusive financial adviser to MDP. Ropes & Gray is serving as legal adviser to MDP and NFP, and Fried, Frank, Harris, Shriver & Jacobson is serving as legal adviser to HPS.
