Canadian private equity firm Onex Corp. said today it has agreed to acquire insurance brokerage USI from Goldman Sachs Group’s GS Capital Partners private equity fund in a transaction valued at $2.3 billion.
The deal is expected to be completed by the end of 2012 subject to customary conditions and regulatory approvals.
USI, based in Briarcliff Manor, N.Y., is ranked as one of the 10-largest insurance brokerages in the United States and the 13th-largest brokerage in the world by revenue, according to insurance ratings agency A.M. Best Company. Founded in 1994, USI has more than 3,300 employees in some 100 offices across the country.
Goldman Sachs Group’s GS Capital Partners bought USI in 2007 in a transaction valued at around $1.4 billion, including repayment of USI’s existing debt obligations. There have been talks in the private equity sector since last summer that Goldman was looking for a buyer for USI.
USI itself has been actively acquiring smaller insurance agencies and brokers in recent years, most recently buying TD Bank’s U.S. insurance subsidiary last September. USI has purchased some 30 firms since being acquired by Goldman.
“Our world-class brokers and investment in differentiating client solutions have allowed us to continually strengthen our market position by providing our clients with a level of value that is unparalleled in the middle-market,” said Mike Sicard, chief executive officer of USI. “We look forward to our next phase of growth in partnership with Onex.”
“USI has established a strong national insurance brokerage with a very impressive management team led by Mike Sicard,” said Robert Le Blanc, managing director at Toronto-based Onex. “The company is well positioned to continue to grow both organically and by building on its track record of successful acquisitions.”
The transaction includes $700 million equity investment by Onex Partners III private equity fund, in which Onex is a 25 percent limited partner, according to the announcement. With offices in Toronto, New York and London, Onex has approximately $14 billion of assets under management, including $4.8 billion of proprietary capital, in private equity, credit securities and real estate. Onex invests its proprietary capital directly and as a substantial limited partner in its funds.