KKR to acquire majority stake in Sedgwick
Private equity firm KKR will acquire majority ownership of Sedgwick Claims Management Services for approximately $2.4 billion.
"We couldn't ask for a better partner in the next stage of Sedgwick's evolution," said David 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.”
Tagar Olson, member of KKR and head of its financial services investment practice said: "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. 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."
Sedgwick handles more than 2.1 million claims and has fiduciary responsibility for claim payments totalling more than $11 billion annually. Its current investors include Hellman & Friedman and Stone Point Capital.
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.
