HUB International Limited (HUB), a leading global insurance brokerage, announced today that it has entered into an agreement with Leonard Green & Partners, L.P. (LGP), a Los Angeles-based private equity firm. With a current total enterprise valuation of $23 billion, which represents the largest enterprise value to date for a private insurance broker, HUB expects to receive a substantial minority investment from funds managed by LGP.
HUB’s valuation has grown fivefold over the last 10 years. HUB had a valuation of $4.4 billion and annual revenue of more than $1 billion in 2013 when Hellman & Friedman (H&F) initially invested in the broker. In 2018, just 4.5 years later, HUB’s revenue exceeded $2 billion and its valuation had grown to $10 billion in connection with Altas Partners’ substantial minority investment in the company. In 2022, HUB hit $3.7 billion in annual revenue and is valued at $23 billion today.
“Despite the headwinds of the pandemic, interest rate hikes, and a global economic downturn, HUB has demonstrated its ability to persevere and excel. In the last 4.5, years we’ve delivered a 2.5 times ROI,” stated Marc Cohen, President and CEO, HUB International. “Our relentless focus on investing in boundaryless resources that provide best-in-class advice and solutions for our customers and our dedication to attracting and retaining the best talent in the industry affirms my optimism and energy for the future potential of HUB.”
HUB attributes its growth to the ongoing investments it has made in industry and product specialization, digital solutions, brand marketing, broadening of employee benefit and human resources services, expansion into retirement and private wealth, growth in MGA/wholesale capabilities, and most recently expanding complex risk and international solutions. The company will continue investing in these areas as well as new initiatives to reflect the changing needs of our clients. Further, HUB remains bullish on its acquisition strategy and growing its geographic footprint.
Today’s announcement also marks HUB’s intention to explore bringing on additional minority investors in the coming months. The proceeds of these investments will be used to repurchase equity interests from existing equity holders. H&F will retain a controlling-interest in HUB, while the company’s management team will continue to hold a significant equity position. Additionally, Altas will remain a significant minority shareholder and continue to be members of the board. LGP will be joining the board.
“HUB is an exceptional company – a gold-standard specialty-focused insurance broker,” said Hunter Philbrick, Partner at Hellman & Friedman. “H&F takes great pride in our long-term approach with the companies we invest in, and it has been a privilege to support HUB’s incredible growth journey over almost a decade. HUB is now the 5th largest broker in the world and is growing faster today than at any point in its history. We look forward to continuing our relationship with the company as the largest shareholder, alongside the fantastic teams at Altas Partners and now, LGP.”
“HUB is a remarkable business with demonstrated success,” said Andrew Sheiner, CEO of Altas Partners. “We are proud to be a part of its incredible journey and look forward to supporting HUB’s future success along with our wonderful partners.”
“We have admired HUB for a long time and are excited to partner with the entire HUB management team, Hellman & Friedman, and Altas to support the next phase of the company’s growth. HUB is the premier insurance broker and has all the attributes we look for in investments – a best-in-class management team, a differentiated culture, a long and consistent track record of success, and multiple ways to grow,” said Adam Levyn, Partner at LGP.
The transaction is expected to close in Q3 2023 and is subject to customary closing conditions and regulatory approvals.
Morgan Stanley & Co. LLC is serving as exclusive financial advisor to HUB, Simpson Thacher & Bartlett LLP is serving as legal counsel to HUB, and MarshBerry provided market research assistance to HUB. Barclays acted as exclusive financial advisor and Latham & Watkins LLP as legal counsel, to LGP.
