BC Partners agreed to take over insurance service company Davies, as it bets on fast-growing demand for outsourcing in the financial industry.
The private equity firm signed a definitive agreement to buy a majority stake in London-based Davies, it said in a statement Tuesday, confirming an earlier Bloomberg News report. The deal values Davies at about 1.2 billion pounds ($1.7 billion) including debt, people familiar with the matter have said.
Investment funds have been pursuing service providers used by financial firms that are increasingly looking to cut costs and pass off routine work. Davies helps insurers, reinsurers and brokers assess and manage claims, as well as handle administrative duties. It uses technology including drones, which help capture images of disaster sites for use in claims processes.
“We at BC have been watching Davies’ progression over the past few years with keen interest,” Cedric Dubourdieu, a partner at BC Partners, said in the statement. “Over this period it has expanded geographically, successfully entering and establishing a presence in the U.S., Canadian and Bermudian markets, completed more than 30 acquisitions, diversified its service offering and cemented its position as a clear leader in its sector.”
Davies, led by Chief Executive Officer Dan Saulter, competes with claims management companies such as Sedgwick. The company employs more than 4,000 people, its website shows. Existing investors HGGC and Alberta Investment Management Corp. will retain minority stakes in Davies after the deal, according to Tuesday’s statement.
The deal adds to a flurry of acquisitions in Europe by private equity firms, which are looking for ways to deploy record amounts of unspent investor cash. BC Partners last month completed a take-private of IMA Industria Macchine Automatiche SpA, a producer of automatic packaging machines. The firm manages more than 33 billion euros ($39 billion) of assets, according to its website.
“We are excited to welcome BC Partners as a majority investor as we embark on this next phase of international growth and technology investment,” Saulter said in the statement. Eligible employees will receive payments in the wake of the transaction, he said.
Waller Helms Advisors, Macquarie Group Ltd. and PwC worked with BC Partners on the acquisition, while Davies management was advised by Liberty Corporate Finance.
Photograph: Skyscrapers in London on Monday, Oct. 26, 2020. Photo credit: Simon Dawson/Bloomberg.
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