LONDON: Apax IX Fund, in which Apax Global Alpha Limited (“AGA”) is a limited partner, has announced the full sale of its minority co-control stake in AssuredPartners, a leading mid-market property, casualty and employee benefits insurance brokerage, to Arthur J. Gallagher & Co.
This transaction is expected to deliver a gross MOIC of 2.5×1 and gross IRR of 16%1 for Apax IX. The transaction values AGA’s look-through investment in AssuredPartners at approximately €51m, representing a discount of c.10% to the last Unaffected Valuation or a decrease of c.€6m in Net Asset Value (“NAV”) of AGA at 30 September 2024. The transaction is expected to close in Q1 2025, subject to the receipt of certain regulatory approvals and customary closing conditions.
Note that these figures relate to AGA’s look-through position of Apax IX’s overall investment in AssuredPartners and are stated before taking into account any closing adjustments, fees, costs, and carried interest, and are translated based on the latest exchange rates available where applicable.
Headquartered in Florida and founded in 2011, AssuredPartners is a middle market insurance brokerage firm offering a range of services, including commercial insurance, risk management, and employee benefits across the United States, United Kingdom, Ireland, and Belgium.
The Apax Funds first invested in AssuredPartners in 2015 through a majority recapitalisation led by Apax VIII. Following the exit of Apax VIII’s investment in AssuredPartners, Apax IX, alongside an investor group led by GTCR, acquired a significant minority co-control (c.27%) stake in the Company in February 2019.
In AssuredPartners, Apax IX saw the opportunity to leverage Apax’s solid track record of value creation in the insurance brokerage space through continued consolidation, shift towards higher growth specialty segments, and margin expansion through greater integration and scale. Furthermore, AssuredPartners was an asset the Apax Funds knew well, allowing for good collaboration with management from the outset.
Over the course of nine years, the Apax Funds supported the Company’s growth into a national leader in insurance brokerage. During Apax Funds’ ownership, AssuredPartners expanded rapidly, completing c.400 acquisitions as it implemented its strategic M&A program and scaling its higher-growth specialty segment through the acquisition of Keenan & Associates. The Funds bolstered AssuredPartners’ organic growth and profitability by investing in operational improvements, including technology, salesforce, and infrastructure capabilities, and supported the Company in recruiting key talent including CIO Sankha Ghosh, CFO Mark Hammond, and CEO Randy Larsen.
AGA, whose shares are listed on the London Stock Exchange, provides investors with access to a diversified portfolio of private equity funds advised by Apax as well as a focused portfolio of mostly debt investments. In 2016, AGA made a commitment of c. $350m to Apax IX.