Genstar Capital, Execs Create National Brokerage for Hispanic Consumers

January 14, 2008

San Francisco-based Genstar Capital LLC, a middle market private equity firm, has partnered with insurance industry executives and Westline Corp. to establish Confie Seguros, a platform company formed to facilitate the consolidation of insurance brokerages in various states that primarily focus on the Hispanic consumer.

In announcing the venture, the new entity jointly announced that Confie Seguros has also completed its first investment in Westline, an insurance brokerage firm serving California.

In the next three years, Genstar and the Confie Seguros management team, led by insurance brokerage CEO John Addeo, look to build a national distribution company with revenues exceeding $300 million, focusing on key markets including, but not limited to, California, Arizona, Florida, Texas, Georgia, and Nevada. Funding for future acquisitions will be provided by a commitment from Genstar and management of $75 million and a bank facility with expected capacity in excess of $200 million.

Addeo has led two consolidations of middle-market property and casualty brokerages. Most recently, he was president and CEO of Alliant Resources Group, a company he founded with revenues exceeding $200 million through 12 acquisitions. Prior to that, he was president and chief operating office of USI Insurance Services, where he acquired 90 insurance brokerages and built USI into the sixth largest brokerage firm in the U.S.

Mordy Rothberg, Stephen Provenzano and Andre Urena have also been named as partners in the Confie Seguros executive team.

Rothberg, founder and president of Confie Seguros, has significant business development experience from his tenure as an executive at IDT Corp and Net2phone. Rothberg will lead the business development and strategy for Confie Seguros.

Provenzano will serve as executive vice president and CFO. Provenzano has more than 25 years of finance and operations experience in multi-unit retail businesses.

Urena will serve as senior vice president of business development. Urena has more than 20 years of insurance industry experience in the Hispanic insurance market and is the CEO and founder of the Latin American Agents Association.

“The attractive growth dynamics of this market and the new business opportunities will enable us to build the first national insurance brokerage with an emphasis on Hispanic consumers,” said Addeo. “Confie Seguros will also position us to bring a variety of other insurance and financial services products to the underserved Hispanic community. We look forward to our new partnership with Westline and Genstar, whose financial support and experience building businesses will be instrumental as we accelerate our growth.”

Westline, based in Cypress, Calif., is of one the largest distributors of non-standard auto insurance products operating from 29 retail branches throughout California. Westline offers its products through three brokerage operations: South Coast Auto Insurance, Solo Insurance, and Freeway Insurance. Westline will serve as the operating platform to build out the California region for Confie Seguros.

“Westline has successfully integrated several brokerage acquisitions over the last five years, and we have developed a proven operational model for these agencies,” said John Klaeb, founder and CEO of Westline, who with chief operating officer Joe Waked, will continue to lead operations and acquisitions in California. “We are excited about partnering with the Confie Seguros team and Genstar Capital to continue to provide valuable insurance products to the community.” John Klaeb will serve as a member of Confie Seguros’ board of directors in addition to his role as CEO of Westline.

“This new investment is consistent with our strategy of partnering with high caliber management teams and investing in quality platform companies that operate in attractive markets with consolidation opportunities to build strong companies,” said J. Ryan Clark, a vice president of Genstar. “We have been working with the management teams of Confie Seguros and Westline to refine the business plan and ensure that the company is properly structured and capitalized to achieve our strategic objectives.”

Source: Genstar Capital LLC, www.gencap.com

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