Onex has begun an auction process for current portfolio company USI Insurance Services and hopes to fetch as much as $4 billion in a sale of the insurance provider, according to Reuters. The Toronto-based firm has owned USI since acquiring the company from Goldman Sachs in a $2.3 billion deal during 2012. Headquartered outside New York City, USI offers property and casualty insurance and services related to employee benefits, personal risk and retirement.
A deal would continue a recent stretch of big-ticket private equity transactions in the insurance industry. Last year brought the two biggest buyouts in the sector since the start of 2012, according to the PitchBook Platform: A PE consortium’s purchase of MultiPlan for $7.5 billion announced in May and Exor’s acquisition of PartnerRe for $6.9 billion finalized in March.
Overall, there were 236 private equity deals in the insurance sector during 2016, about a 15% drop from the year before. That’s a significant dip, but it does lag slightly behind the 17.3% decrease in overall PE activity. It was the second year in a row that activity trends in the insurance industry mirrored those in PE as a whole, only to a less dramatic degree. From 2014 to 2015, insurance activity climbed about 7% while total private equity deal count jumped 13.3%.
The busiest PE investor in the space since the start of 2012 is ABRY Partners, with 98 deals—many of them add-ons to Confie Seguros, a portfolio company that’s driven major consolidation in the sector and now claims more than 700 locations in the US. The three other major players in the space are HarbourVest Partners (82 deals), GTCR (79) and Hellman & Friedman (74); no other PE firm has more than 42 insurance acquisitions in the past five years.
Article by Kevin Dowd, PitchBook