KKR and CDPQ in $4.3bn USI Insurance takeover deal

Private equity firm KKR and Canada-based Caisse de dépôt et placement du Québec (CDPQ) are set to acquire US insurance brokerage and consulting firm USI Insurance Services.

The offer by KKR and CDPQ values Onex Corporation-owned USI at $4.3 billion.

USI operates in property/casualty, employee benefits, personal risk and retirement solutions across the US.

The transaction is expected to close by the end of the second quarter 2017.

The investment will primarily be made through KKR and CDPQ’s core private equity partnership, which includes funds from KKR’s balance sheet and from CDPQ’s pool of capital, in equal ownership.

Michael Sicard, chairman and CEO of USI, said: "We are passionately committed to continuing and accelerating USI’s growth and investment as a leader in our industry, leveraging and innovating our unique USI ONE Advantage.

"We are excited to work with our new partners at KKR and CDPQ, and want to thank our partners at Onex for the tremendous support they provided to USI."

"USI is a fantastic company and is uniquely positioned to help address the risk management, insurance and employee benefits-related needs of small and medium-sized business owners," said Tagar Olson, head of KKR’s financial services investing practice.

"We look forward to working with CDPQ in helping management achieve its long-term vision to grow the business through accelerated investments in USI’s people, technology and solutions. Our successful experience in the insurance and benefits brokerage industry, coupled with the impressive track record of Mike Sicard and the USI management team, give us confidence in our ability to generate compelling returns while growing the business over the long term."

Christian Puscasiu, co-head of direct investments, private equity at CDPQ, added: "CDPQ and KKR are co-leading this investment and leveraging their respective expertise in the sector to support USI’s world-class management as it pursues its strategic plan for long-term growth. Our partnership was established to implement both firms’ patient, disciplined and collaborative investment approach.

"USI operates in a resilient sector characterized by stable, long-term returns and serves small and medium-sized businesses, which are the cornerstone of the US economy."

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