San Francisco-based Hellman & Friedman agreed to acquire Hub International Inc., an insurance company. Bloomberg reported that the transaction, valued at USD 4.4 billion, is set to be the largest insurance broker buy in the US based on the data they have compiled. When the deal is completed, the buyout firm will have control as their funds will own majority stake of Hub International. The latter said its management will hold a "significant equity position."
Based in Chicago, Hub has a projected 2013 revenue of USD 1.2 billion. In a statement, Managing Director of Hellman & Friedman David Tunnell said the insurance broker's "growing market footprint and capabilities will allow it to capitalize on significant opportunities going forward." Its operations span the US, Canada and Brazil with a workforce that numbers more than 6,500 employees.
It has been the strategy of private equity companies to strike deals with insurance companies because of the steady cash flow they provide along with the low capital expenditure it necessitates.
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