Sedgwick, a claims and technology services provider, is now majority owned by the Carlyle Group Global. On December 31, funds managed by Carlyle concluded an ownership deal worth approximately $6.7 billion.
KKR, the previous main stakeholder, is completely quitting the company. In 2014, KKR and company management paid $2.4 billion for Sedgwick.
Is Sedgwick privately owned?
MEMPHIS, Tenn. Sedgwick Claims Management Services Inc.’s $1.1 billion private equity takeover allows the third-party claims administrator to stay privately held while gaining two new strategic partners, according to the company’s top executive.
Last week, Stone Point Capital L.L.C., Hellman & Friedman L.L.C., and Sedgwick CMS management agreed to buy the TPA from another group of investors.
In January 2006, title insurer Fidelity National Financial Inc., Thomas H. Lee Partners L.P., Evercore Capital Partners, and other minority owners paid $635 million for Sedgwick CMS.
According to company executives, the most recent private equity agreement, which is slated to finalize in the second quarter, is considered as a natural and successful conclusion to Fidelity National’s four-year commitment.
In a statement, Fidelity National Chairman William P. Foley II said, “The sale of Sedgwick obviously accomplishes our continued goal of creating considerable value for our shareholders and is the culmination of a very successful four-year investment.”
Fidelity National anticipates to receive net proceeds of around $220 million for its 32 percent equity ownership investment in Sedgwick CMS under the terms of the agreement to sell the TPA.
The acquisition permits Sedgwick CMS to remain a privately held, independent corporation, which is the “optimal structure for us,” according to President and CEO David A. North of Sedgwick CMS. “It enables us to make business decisions that are only in our customers’ and colleagues’ best interests.”
Mr. North noted that both Hellman & Friedman and Stone Point “bring some attributes to the table that I believe will be very advantageous to us in the next phase of our growth and development.”
Hellman & Friedman, based in San Francisco, is an experienced investor in technology and related services, and will bring “expertise to us as members of the board of directors and advisers, in the area of technology, which is today and will continue to be a very important part of the service offerings that allow us to continue to deliver highly efficient services to our customers in an integrated fashion,” he said.
And with Stone Point, based in Greenwich, Conn., “it’s not only the check they can write, it’s their knowledge into the sector,” Mr. North said, referring to the company’s history of investing in the insurance services industry.
Stone Point will be able to help the company develop new products and services, as well as “how we represent Sedgwick in the eyes of employers as being part of the solution, not just an administrative burden,” he said.
Stone Point has now invested in Sedgwick CMS for the second time. Marsh & McLennan Cos. Inc. sold a 40 percent stake in the TPA to Trident II L.P., a Stone Point-managed fund, in November 1999, as part of its 1998 acquisition of Sedgwick Group P.L.C.
Six years later, MMC and Stone Point sold Sedgwick CMS to Fidelity National and other investors.
Fidelity National will benefit from the agreement, according to Mark Dwelle of RBC Capital Markets, because it will give the insurer with additional cash to pay down debt or repurchase stock.
Mr. Dwelle stated in a research note issued after the acquisition was announced, “Fidelity owns a number of these “equity investments in affiliates’ and “noncore activities’ and investors are normally quite skeptical about them.” “The fact that we were able to sell this one for a healthy profit should back up our claim that FNF does pretty well with these investments.”
Who owns Sedgwick loss adjusters?
In a $6.7 billion agreement, funds backed by private equity behemoth The Carlyle Group will become the main owner of global claims management company Sedgwick.
Carlyle Partners VII, a $18.5 billion fund committed to buyout deals in the United States, and Carlyle Global Financial Services Partners III, L.P., a dedicated financial services buyout fund, will provide equity for the acquisition. Subject to usual closing conditions and regulatory clearances, the transaction is expected to close in late 2018.
KKR, Sedgwick’s current majority shareholder, will quit the company four years after paying $2.4 billion for it. Stone Point Capital LLC and the Caisse de dépôt et placement du Québec (CDPQ), as well as Sedgwick management, will remain minority shareholders in the company.
Sedgwick’s international expansion has been guided by KKR. As a result of its acquisition of loss adjuster Cunningham Lindsey in May, the business now has a presence in more than 60 markets throughout the world. Traditionally, the company specialized on claims management, but in recent years, it has broadened its scope to include risk and benefits management. According to a statement announcing the deal, Sedgwick, the largest insurance claims handler in the United States, processes more than 3.6 million claims annually for a wide range of insurance product lines, including workers’ compensation, general liability, and disability, and has fiduciary responsibility for claim payments totaling more than $19.5 billion.
Carlyle Group is thought to have beaten out Hellman & Friedman, a rival PE firm and previous Sedgwick owner, to obtain the acquisition for Sedgwick. “People are at the center of all we do at Sedgwick, and I am happy that The Carlyle Group recognizes the value our colleagues produce when they put our caring counts attitude into reality,” said Dave North, president and chief executive of Sedgwick. “We are humbled by their faith in our business model, and we look forward to collaborating with Carlyle on developing and delivering innovative solutions for our global clientele. We appreciate the robust and value-added cooperation we’ve had with KKR over the previous few years.”
“Carlyle managing director and co-head of global financial services John C. Redett commented, “We are happy to partner with Sedgwick’s great management team and very accomplished people.” “We’re excited to be a part of Sedgwick’s next phase of growth and innovation, and to collaborate with the firm as it develops its worldwide platform to satisfy the increasingly complex needs of its customers throughout the world, all while using the One Carlyle network.”
“Tagar Olson, director of Sedgwick, member of KKR, and head of KKR’s financial services investing operations, said, “We have tremendously cherished our cooperation with Sedgwick and its superb management team.” “We’re excited to see the company’s continuous success in providing high-quality, technology-driven insurance solutions to clients and customers all around the world.”
Private equity groups are rapidly making inroads into the insurance industry. Apollo Global Management bought Athene in 2014. In 2017, Sovereign Capital agreed to finance Arachas Corporate Brokers’ management buyout, and MGA UK General was acquired by J.C. Flowers & Co.
Carlyle owns a controlling position in wholesale broker JenCap Holdings and a stake in reinsurance company DSA Re, which it bought from American International Group.
The announcement of the Sedgwick acquisition comes after a busy fundraising year for Carlyle. Over the summer, the firm closed its eighth US real estate fund, which had a $5.5 billion hard restriction, and its seventh flagship vehicle, which had a $18.5 billion hard cap. Carlyle presently manages $210 billion in assets.
Is Sedgwick still in business?
A group of 47 former Sedgwick partners will pay $1.9 million to settle charges that were part of a bankruptcy plan approved by a federal judge.
While the plan’s approval on Thursday gives that group some relief after a long process, 19 other partners who did not agree to settle could face legal action to recover funds from the firm.
According to a financial study, pursuing clawback claims against those non-settling partners might net the liquidation trust an additional $683,000 for creditors.
After 85 years, Sedgwick, based in San Francisco, closed its doors in January 2018. In October of the following year, the company declared bankruptcy.
The settlement with former partners avoids costly Chapter 7 liquidation and avoids litigation about when the firm became insolvent.
The insolvency date is significant because it allows the law firm’s creditors to pursue any payments Sedgwick made to partners after that date. When partners quit a legal firm, they usually get their capital payments back. Those payments are hotly contested in a bankruptcy setting.
According to court filings, the $2 million to be paid by the 47 partners represents nearly 104 percent of the claims against them as of May 2017. That date is somewhere in the middle of the creditors’ and legal firm’s arguments on when Sedgwick went insolvent.
It is unknown how much each partner contributed to the settlement. They were confronted with a variety of claims based on the amount of compensation and capital returns they had received.
In re: Sedgwick LLP, Bankr. N.D. Cal., 18-31087, Bankr. N.D. Cal., No. 18-31087, the case is In re: Sedgwick LLP, Bankr. N.D. Cal., 18-31087, Bankr. N.D. Cal., No. 18-31087.
Is Sedgwick owned by Marsh?
Marsh & McLennan Cos., the world’s largest insurance broker, has acquired Sedgwick, the largest European-based independent insurance broker, for $2 billion in cash, putting Chicago-based Aon Group in second place.
Is Sedgwick a third party administrator?
Our third-party administration (TPA) services provide our clients with the support of Sedgwick’s in-house colleagues, allowing them to manage claims as if they were an extension of their own staff.
Did Sedgwick buy VeriClaim?
Cunningham Lindsey was originally controlled by Stone Point, which held a majority stake, and Fairfax Financial Holdings Ltd., which held a significant minority stake. Cunningham Lindsey was put up for sale in 2012. CVC Capital Partners, a private investor company, bought a majority stake in Cunningham Lindsey in December 2012.
KKR owns the majority of Sedgwick; minority owners include Stone Point Capital LLC, La Caisse de dépôt et placement du Québec (CDPQ), and other management investors. Sedgwick was purchased for $1.1 billion in 2010 by Stone Point Capital and Hellman & Friedman.
T&H Global Holdings, LLC and its subsidiaries (T&H) were purchased by Sedgwick in October 2014, and include VeriClaim Inc., VRS VeriClaim U.K. Ltd, Unified Investigations & Sciences Inc., Cramer, Johnson, Wiggins & Associates Inc. (CJW), and Ellis May Chartered Loss Adjusters.
Is VeriClaim now Sedgwick?
(Sedgwick) today announced the completion of its acquisition of T&H Global Holdings, LLC and its subsidiaries (T&H). “Together, Sedgwick, VeriClaim, and T&H provide the expertise of over 12,000 experienced and brilliant colleagues,” stated David A. North, president and CEO.
What is loss adjuster in insurance?
A loss adjuster is employed by an insurance firm and is responsible for increasing the company’s bottom line. They act in the best interests of the insurance business, and their job is to reduce the amount of compensation the firm pays out for claims.
On the other side, a loss assessor works on behalf of the insurer and claimant. They negotiate with loss adjusters and use their insurance industry knowledge to manage insurance claims and get their clients the best possible pay-out.
Who is Sedgewick?
Sedgwick. Sedgwick is a prominent provider of technology-enabled risk, benefits, and integrated business solutions throughout the world. Our roughly 30,000 workers are spread across 65 countries, allowing us to provide services that are tailored to our customers’ and consumers’ changing demands.
How old is Sedgwick Company?
Sedgwick has developed from its humble beginnings as a regional claims administrator in 1969 to become a prominent global provider of technology-enabled risk, benefits, and integrated business solutions with approximately 30,000 employees in 65 countries.