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Carlyle acquires majority stake in Sedgwick in $6.7bn takeover

September 13, 2018

Private equity firm The Carlyle Group has agreed to acquire a majority stake in claims management group Sedgwick for $6.7bn.

Carlyle will buyout existing majority shareholder KKR, which will fully exit its position following the transaction. KKR and company management paid $2.4bn in 2014 to buy Sedgwick.

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

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits and other lines.

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

“At Sedgwick, taking care of people is at the heart of everything we do, and I am proud that The Carlyle Group appreciates the value our colleagues create when they put our caring counts philosophy into practice,” said Dave North, president and CEO of Sedgwick.

“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. We are grateful for the strong and value-added partnership with KKR over the last handful of years.”

Meanwhile, 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.”

Equity capital for the investment will come from Carlyle Partners VII, an $18.5bn fund that focuses on buyout transactions in the US, and Carlyle Global Financial Services Partners III, L.P., a dedicated financial services buyout fund.

The deal is expected to close later this year, subject to regulatory approvals and other customary closing conditions.