insurance

Private Equity Firm Odyssey Buys A Brokerage Firm

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August 6, 2015

 

The insurance sector has seen a number of big deals this year. Wednesday saw the announcement of yet another deal, as the US-based private equity firm Odyssey Investment Partners announced it has acquired Integro.

 

The Deal

 

Like with many private equity deals this year, the financial details of the deal remain unknown. But as the company is the largest private broker and risk management firm in the US, in terms of its property and casualty written premium, the private equity firm has clearly seen plenty of growth potential in the firm.

 

The firm’s client base runs all the way from Canada to the Bermuda and the UK. It currently has clients in over 125 countries and it has a number of offices around the world.

 

According to Jeffrey McKibben, a managing principal of Odyssey, the firm is “an extraordinary success story”. McKibben went on to say, “We are committed to supporting its continued development, particularly around its specialty offerings”.

 

The official statement said the Integro’s shareholders, who control around 70% of the company’s shares, have “entered into agreements with the acquiring entities”.

 

Focus on Brokers

 

The private equity firm has been busy in the brokerage sector, as it has acquired a number of insurance companies. Earlier this year it bought NPA Insurance, as well as the London-based Kite Warren & Wilson, which focuses on marine hull and liabilities.

 

Its last year wasn’t much quieter either, as it made big deals to buy a range of companies in the sector. These deals included Howard Global and Richard Thacker & Company.

 

Odyssey’s investment strategy is all about acquiring middle-market businesses and then transforming them into more efficient and more growth-led operators.

 

Increasing Interest

 

The sector has attracted a lot of interest from private equity firms this year. Many firms see the growth prospects of the sector will continue to remain strong and companies are trying to position themselves to a more competitive market.

 

William Goldstein, the president of Integro, said in the official statement, “Odyssey’s resources and industry expertise will help accelerate the growth trajectory of our core business and specialty acquisitions.”

 

Just recently, private equity firm Apax acquired the US-based AssuredPartners in a similar deal. At the time, Jim Henderson, the chairman and CEO of AssuredPartners, said, “We look forward to our partnership with the Apax team as we pursue the next chapter in our vision to build one of the leading middle-market retail insurance brokerage firms in the nation”.

 

According to a recent Forbes article, the insurance sector is finding private equity increasingly the most viable method of financing the business operations. On the other hand, private equity is also more comfortable with the profit models in the industry. The article cited research by Mayer & Brown, which found 67% of P&C respondents trusting the buyout industry to be the most common deal type within the sector.

 

Both deals are expected to close later this year and will be subject to regulatory approval. For private equity firms, the latest deal is unlikely to be the last in the sector this year.

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