Sedgwick Sold

Private Equity Owner Change At Sedgwick

By: | January 27, 2014

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Sedgwick Claims Management Services Inc. has been sold to investment firm Kohlberg Kravis Roberts & Co. L.P. in a $2.4 billion transaction representing twice its sales price 3.5 years ago.

Operational changes are not anticipated at Sedgwick, with current management committed to remaining in place and taking partial ownership following the sale by the claims management company’s current private equity owners Hellman & Friedman L.L.C. and Stone Point Capital L.L.C., said Dave A. North, Sedgwick president and CEO.

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“There is no change in either the corporate name or structure or individuals operating [Sedgwick] or any of the businesses,” said North, whose role will not change. “This is truly a change in stock holders.”

The deal is expected to close during the first quarter, he said.

The $2.4 billion sales price represents more than 11.5 times earnings, North said.

“This is both a normal and great thing for us,” North said. “We love the private equity ownership structure because of the independence and privacy it gives us. To think KKR would invest in us at the value they put on us is a great reflection of the value our colleagues have created and our industry as a whole.”

KKR already owns broker Alliant Insurance Services Inc. and insurance technology company Mitchell International Inc. But there is no plan to integrate the companies, North said.

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