Personal lines insurance broker Confie said it has closed on a new $220 million credit facility, led by Goldman Sachs and Barclays.
In addition to the refinancing, Confie said it has a $90 million revolving credit facility which is undrawn and will be used to finance future acquisitions and investments in the company.
The financial transactions come at a time when Confie is battling over a failed acquisition and reportedly carrying more than $900 million in debt, some of which is due over coming months. Confie is suing J.C. Flowers, which it paid $100 million for another brokerage that turned out to be on the brink of financial failure.
In less than 10 years since its founding in 2008, Confie has grown organically and through acquisitions with a focus on Hispanic drivers to become one of the nation’s largest privately-held insurance brokerage. Confie says it has completed more than 100 acquisitions since its inception in 2008. Today, Confie has nearly 800 retail locations.
The announcement also comes on the heels of the departure of Mordy Rothberg, founder and president of Confie. “It’s been a great run, but unfortunately it had to end,” Rothberg told Insurance Journal.
“It’s been a great run, but unfortunately it had to end,” Rothberg told Insurance Journal.
The company announced in late August that Cesar Soriano, who has been chief operating officer for Confie since 2016, would take over as Confie’s chief executive officer. Rothberg was to continue to serve in the same capacities, the firm said at the time.
Rothberg said his exit was a family and not a business decision, and that it was his decision to leave. He declined to offer details of the terms of his departure or whether he will retain any ownership interests in the Huntington Beach, Calif.-based firm.
Confie is a portfolio company of Abry Partners, a Boston private equity firm with insurance sector experience, which in addition to new investors is contributing growth equity capital to support a continued strategy of acquiring agencies and investing in organic growth.
“This new facility reduces our overall cost of capital and gives us the flexibility to better pursue those growth opportunities, expand our markets, provide excellent services for new and existing customers, as well as make ongoing investment in our internal operations that will drive further organic growth.” said CEO Soriano.
“The insurance sector remains highly fragmented and we are excited about the robust pipeline of high-quality acquisition targets we are currently evaluating,” Sorinao added.
Soriano said the debt financing was funded by both new and existing lenders and was well oversubscribed. In connection with the refinancing, the corporate family rating of Confie has been updated from Caa1 to B3 by Moody’s and from CCC to B- by S&P.
Tomer Yosef-Or, partner at Abry, said the additional capital it is investing will reduce Confie’s long-term debt and help Confie grow its business over the next several years. He said the credit agreement allows for a reduction in cash interest expense by more than 20 percent.
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