Hyperion Insurance Group revealed that long-term institutional investor, Caisse de dépôt et placement du Québec (CDPQ) has agreed to acquire a notable minority stake in the Group.

CDPR will invest over USD$400mn to new growth equity as well as liquidity to existing shareholders.

CDPR will join together with Hyperion as a long term growth partner alongside General Atlantic.

Hyperion management and employees will remain the largest shareholder group.

For the financial year which ended 30 September, the Group reported preliminary unaudited revenue of GBP£535mn and earnings before interest, taxes, depreciation and amortization (EBITDA) of GBP£152mn on a bank reported basis.

Hyperion is set to launch a debt refinancing, which will extend and reprice its existing term loan facility to 2024 and include the issuance of additional primary debt.

In addition, Hyperion will extend its existing undrawn revolving credit facility. In conjunction with the CDPQ investment, this will leave Hyperion well placed to execute on its medium term growth strategy from a strongly capitalised position and with significant free cash, providing over USD$300mn of additional capital for future investments.

Selective acquisitions with a strong cultural fit will continue to play an important role in Hyperion’s growth strategy with a number of deals already in the pipeline.

For the transaction, Morgan Stanley & Co LLC acted as financial advisor to Hyperion and General Atlantic. Weil, Gotshal & Manges served as legal advisor and Linklaters LLP served as legal advisor for CDPQ.

The equity transaction is subject to regulatory consents.

The Board expects to approve Hyperion’s FY17 consolidated audited accounts shortly.

CEO of Hyperion, David Howden said: “CDPQ is a fantastic partner to support us on the next leg of our journey. Their strategy to invest based on long term fundamentals combined with their deep understanding of insurance markets and significant international portfolio, mean they will deliver valuable insight to help direct our future plans, whilst remaining supportive of our independence and of our resolute focus on putting our clients at the centre of everything we do.” 

He continued: “Since General Atlantic’s initial investment in 2013, the Group’s revenue has grown by almost five times, our EBITDA has increased from GBP£36mn to over GBP£150mn, and we have created very significant value for all of our shareholders. GA has been more than just an investor, it has been an active and collaborative growth partner whose intellectual capital, significant technological expertise, global resources and experience have played a central role in our success over the past four years, and I am delighted that they will continue to do so.”

Executive vice-president and head of private equity at CDPQ, Stephane Etroy remarked: “We are pleased to partner alongside David Howden, his management team and General Atlantic to continue Hyperion’s track record of success. Hyperion has a very strong entrepreneurial culture that has consistently yielded superior organic growth. This transaction allows us to support the Group in its global growth strategy while at the same time benefiting from a stable and counter-cyclical industry, together with a high-quality partner who shares our long-term vision.”

Managing director and co-head of EMEA, General Atlantic, John Bernstein, said: “Over the last four years we have enjoyed a strong working relationship with Hyperion over a period in which the Group has delivered market-leading organic growth, a transformational merger with RKH, and significantly invested in embracing technology and transforming its operational platform. This unique group has a bright future and we look forward to working with CDPQ and Hyperion as it continues its rapid growth in the provision of leading insurance services to its customers globally.”