Global insurance brokerage Hub International Limited (HUB), has entered into an agreement with Los Angeles-based private equity firm, Leonard Green & Partners, L.P. (LGP) for an expected “substantial” minority investment with HUB’s enterprise valuation of $23 billion.
HUB said that the valuation marks the largest enterprise value to date for a private insurance broker.
HUB states that its valuation has grown fivefold over the last 10 years. In 2013, the firm had a valuation of $4.4 billion and annual revenue of more than $1 billion when Hellman & Friedman (H&F) initially invested in the broker.
Fast-forward to 2018, and 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.
Then in 2022, HUB managed to hit $3.7 billion in annual revenue and is currently valued at $23 billion today.
The agreement also plays a pivotal role in HUB’s intention to explore bringing on additional minority investors within the coming months. The company saids that the proceeds will be used to repurchase equity interests from existing equity holders.
At the same time, H&F will retain a controlling-interest in HUB, while the company’s management team will continue to hold a significant equity position. Altas will also remain a significant minority shareholder and continue to be members of the board. LGP will also be joining the board.
Marc Cohen, President and CEO, Hub International, commented: “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.”
Hunter Philbrick, Partner at Hellman & Friedman, added: “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.”
Andrew Sheiner, CEO of Altas Partners, said: “HUB is a remarkable business with demonstrated success. 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.”
Adam Levyn, Partner at LGP, commented: “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.”
