KKR to Buy Majority Stake in Claims Firm Sedgwick for $2.4 Billion

By Devin Banerjee | January 27, 2014

Sedgwick Claims Management Services Inc. said KKR & Co. LLP and company management would buy the provider of claims services for $2.4 billion, the latest in a wave of private-equity activity in the growing industry.

A rising number of claims has attracted private equity interest in the sector over the last two years.

KKR’s deal to buy Sedgwick from private equity firms Stone Point and Hellman & Friedman is its second in the industry in recent months.

KKR said in September it would acquire car and property claims software company Mitchell International Inc. from Los-Angeles buyout firm Aurora Capital.

That deal was valued at $1.1 billion, according to a person familiar with the matter.

Apax Partners LLP agreed in October to buy One Call Care Management Inc., a medical cost containment services company, and Align Networks Inc, a provider of workers’ compensation physical medicine programs, in deals that had a combined value of about $3 billion.

Founded in 1969, Memphis-based Sedgwick is a major provider of claims processing services, specializing in workers’ compensation, disability, automobile, warranty, credit card and healthcare claims.

Sedgwick last changed ownership in May 2010, when Stone Point and Hellman & Friedman, together with the company’s management, acquired it from Fidelity National Financial Inc. , Thomas H. Lee Partners LP, Evercore Capital Partners and other minority shareholders.

Reuters reported in December that Sedgwick was exploring a sale.

Sedgwick said the deal was expected to close in the first quarter of 2014.

Hellman & Friedman announced last week it had closed on its purchase of insurance technology firm Applied Systems from Bain Capital for $1.8 billion.

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