On Monday, USI Insurance Services announced that existing shareholder KKR intends to make a fresh equity investment of more than $1 billion to become the company’s largest investor.
As part of the arrangement, private equity company KKR and USI would purchase shares of USI held by pension fund Caisse de dépôt et placement du Québec (CDPQ) and some other investors.
KKR and Valhalla, New York-based USI will buy shares of the company held by CDPQ and other investors under the terms of a new agreement, which is anticipated to be completed by the end of 2023. According to USI, the transaction will purchase more than half of CDPQ’s shares.
CDPQ and KKR purchased USI from investment firm Onex in 2017 for $4.3 billion, including debt.
USI offers insurance and employee benefit packages to businesses in the United States.
“When we embarked on our journey with KKR and CDPQ, we shared a vision about the forces impacting our industry and a plan for USI to be a leading innovator in that transformation, combining world-class sponsorship and investment with our team of experts, differentiated solutions and technology,” said Michael Sicard, chairman and CEO of USI, in a statement.
“The power of this strategic partnership has exceeded our expectations, and we are thrilled to be continuing our journey with the support of our long-term shareholders.”
USI stated that its workforce had more than doubled to over 10,000 people spread over more than 200 offices, and that its management and employees would retain significant ownership in the firm moving forward.
“We are enormously proud of everything the USI team has accomplished and we have a high conviction in the opportunity ahead for this winning team and operating model as USI continues to innovate and scale,” added Chris Harrington, partner at KKR.
“Together with CDPQ we have supported significant investments in USI’s platform and technology that position USI for long-term growth. We are pleased to reach this agreement to increase our ownership with a substantial investment of additional long-term capital.”