Hub to receive investment from private equity firm
Global insurance brokerage HUB International has entered into an agreement with Leonard Green & Partners, a Los Angeles-based private equity firm. Hub expects to receive a substantial minority investment from funds managed by LGP at a total enterprise valuation of $23 billion, which represents “the largest enterprise value to date for a private insurance broker.”
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 initially invested in the broker. In 2018, Hub’s revenue exceeded $2 billion and its valuation had grown to $10 billion in connection with Altas Partners’ minority investment in the company. In 2022, Hub hit $3.7 billion in annual revenue and is valued at $23 billion today.
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.
“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. 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.” – Marc Cohen, president and CEO, Hub International.
“HUB is an exceptional company – a gold-standard specialty-focused insurance broker. 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.” – Hunter Philbrick, partner at Hellman & Friedman.
The transaction is expected to close in Q3 2023 and is subject to customary closing conditions and regulatory approvals.