The Carlyle Group, a private equity company, has acquired Sedgwick, US insurance claims service provider, in a deal that was worth $6.7 billion (£5.1 billion).
According to a joint release from Carlyle and Sedgwick on Wednesday, KKR, the current majority shareholder, will be exiting the group and CDPQ, Sedgwick management, and Stone Point Capital will continue to be minority shareholders when the deal closes later this year.
KKR acquired its majority stake in the company in February 2014 for $2.4 billion.
According to Carlyle, the $6.7 billion deal includes debt and equity, however, Carlyle refused to disclose any additional details regarding the matter.
Currently, Sedgwick handles more than 3.6 million claims per year, which are estimated to be worth more than $19.5 billion.
Stephen Wise, the managing director and head of healthcare of The Carlyle Group, stated: “Dave North and Sedgwick’s world-class management team have built the company into an industry leader over the last two decades.”
He added: “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.”
The equity capital for the investment will be coming from Carlyle Partners VII, an $18.5 billion fund that concentrates on US buyouts, and the Carlyle Global Financial Services Partners III, which serves as a dedicated financial services buyout fund.
Merrill Lynch was the financial advisor to Sedgwick, and Simpson Thacher & Bartlett served as legal advisor.
Morgan Stanley, KKR Capital Markets, and Merrill Lynch are all expected to provide the debt financing for the said transaction.
Meanwhile, Sandler O’Neill + Partners and Morgan Stanley served as the financial advisors to Carlyle, and Wachtell, Lipton, Rosen & Katz was the legal advisor.
The shares of KKR and Carlyle both rose by almost 1 percent in recent trade on Thursday.