Carlyle Group buys majority stake in Sedgwick in $6.7bn deal

Private equity firm The Carlyle Group will acquire the majority ownership of technology-driven risk solutions provider Sedgwick in a transaction valued at approximately $6.7 billion.

Sedgwick's current majority shareholder KKR, which acquired the stake for approximately $2.4 billion in Jan 2014, will fully exit its position following the transaction.

Funds managed by Stone Point Capital and Caisse de dépôt et placement du Québec (CDPQ), together with Sedgwick management, will remain minority investors.

According to the company, equity capital for the investment will come from Carlyle Partners VII, an $18.5 billion fund that focuses on buyout transactions in the US, and Carlyle Global Financial Services Partners III, a dedicated financial services buyout fund.

On an annual basis, Sedgwick handles more than 3.6 million claims and has fiduciary responsibility for claim payments totaling more than $19.5 billion.

Both the companies are working to close the deal later this year.

“We are humbled by the confidence they have shown in our business model, and we look forward to partnering with Carlyle on developing and delivering innovative solutions for our clients around the world," said Dave North, president and CEO of Sedgwick. "We are grateful for the strong and value-added partnership with KKR over the last handful of years.”

Stephen Wise, managing director and global head of healthcare for The Carlyle Group, said: “Dave North and Sedgwick’s world-class management team have built the company into an industry leader over the last two decades. We are excited to collaborate with Sedgwick, which has distinguished itself by constantly improving the claims management and loss adjusting process to the benefit of all key stakeholders, including its colleagues, customers, insurance companies and brokers.”

John Redett, Carlyle managing director and co-head of global financial services, added: “We are pleased to partner with the exceptional management team and highly talented colleagues of Sedgwick. We look forward to participating in Sedgwick’s next chapter of growth and innovation and working with the company as it builds out its global platform to meet the increasingly complex needs of its clients around the world, while leveraging the One Carlyle network.”

Tagar Olson, director of Sedgwick, Member of KKR, and head of KKR’s financial services investing efforts, commented: “We have greatly valued our partnership with Sedgwick and its exceptional management team. We look forward to watching the company’s continued success in delivering high quality technology-driven insurance solutions to clients and consumers around the globe.”

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