Private Equity Firm Hg Invests in Hyperion in Transaction Valued at US$5 Billion

September 30, 2020

Hg, the European private equity investor focused on software and service businesses, announced it will make a significant long-term equity investment in Hyperion Insurance Group Ltd., the insurance intermediary.

The transaction values the business at an enterprise value of around US$5 billion. In conjunction with an additional debt raise and existing resources, the investment will provide Hyperion with up to $1.5 billion to accelerate its growth with both selective acquisitions and investments in data and technology, said Hyperion in a statement.

Hg will join Hyperion as an aligned, long-term, growth partner alongside General Atlantic, which invested in Hyperion in 2013, and CDPQ, which invested in Hyperion in 2018. The Hyperion management team and employees will remain the largest shareholder group in the company, with more than 1,000 individuals now owning shares.

The transaction establishes a sustainable, long-term capital model with core employee ownership supported by collaborative investment partners, enabling Hyperion to build out Howden as a leading international challenger broker and DUAL as an international specialist MGA.

The full terms of the transaction are not disclosed and closing is subject to obtaining relevant regulatory approvals.

The investment continues Hg’s focus on insurance distribution and insuretech. Hyperion will represent Hg’s sixth investment in the wider sector over the last 5 years – with these businesses together totalling over $1 billion of invested client capital.

Hyperion’s broking arm, Howden, recently announced it had reached agreement to acquire A-Plan Group from Hg. Hg helped to drive a focus on embedding data and technology in A-Plan Group’s best-in-class service model over its investment period. This experience in technology will also benefit Hyperion X, the Group’s digital, data and analytics business.

“I am thrilled to welcome Hg as a long-term partner. During our conversations on A-Plan Group it was clear that Hg and Hyperion share an understanding of what building a business to last means for employees and clients,” said David Howden, chief executive officer of Hyperion.

“This, the quality of the Hg team, their support for our core employee ownership and our culture of empowerment, and the desire of the Hg partners to contribute to our digital and data strategy, makes them an excellent partner to join General Atlantic and CDPQ as we continue our journey,” he added.

“It is a privilege for Hg to back David and his fantastic team through this investment in Hyperion. The company is a unique and special business, driven by its outstanding culture and quality of talent, and it has a significant growth opportunity across the global insurance sector in the coming years,” commented Andrew Land, partner at Hg.

“We got to know David during the recent sale by Hg of A-Plan Group to Hyperion, and it became clear that our long-term investment approach and specialism in technology were a great match for him and his team. In addition to providing capital, Hg’s deep knowledge of software and data will help Hyperion stay at the forefront of technology adoption across the insurance sector,” said Land.

“I am delighted that Hg have chosen to become a partner alongside General Atlantic and CDPQ. It is a privilege to work with three partners who embrace our core ambition to build a sustainable and successful business, and who will help us to deliver on our strategy over the coming years at this very exciting time in the industry,” said Dominic Collins, chairman of Hyperion. “The Hg team bring not only significant capital, but also considerable expertise and I look forward to welcoming them to the board.”

Founded in 1994 and headquartered in London, Hyperion’s core activities are retail, specialty & reinsurance broking. Through its MGA subsidiary DUAL, it facilitates the provision of B2B insurance across a wide geographic footprint. Hyperion operates across 200-plus global offices in 40 countries and employs around 6,000 people to manage approximately $9 billion of gross written premium on behalf of its clients. It is the fifth largest employee-owned business in the UK.

A European investor in software and services, Hg is focused on backing businesses that “change how we all do business,” the company said. Hg has funds under management of over $30 billion, with an investment team of over 140 professionals, plus a portfolio team of more than 30 operators, providing practical support to help our businesses to realise their growth ambitions. Based in London, Munich and New York, Hg has a portfolio of over 30 software and technology businesses, comprising over 30,000 employees across the UK, U.S. and Europe.

Source: Hyperion

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