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Stone Point Capital returns to back Sedgwick in $1.1bn buy-out

20 Apr 2010

Private equity firms Stone Point Capital and Hellman & Friedman have agreed to pay $1.1bn for Sedgwick Claims Management Services Inc, a provider of claims and productivity management that is part-owned by Fidelity National Financial Inc.

Sedgwick also counts private equity firms Thomas H. Lee Partners and Evercore Capital Partners as current shareholders.

Sedgwick specialises in workers’ compensation, disability, employee absence, general, automobile and professional liability, and warranty and credit card claims services.

According to the company’s annual report for 2008 to 2009, the claims management business’ retention rate was 96.5 per cent, claims reached around $7.4bn and revenues grew by five per cent to $691m.

Charles Davis, CEO of Stone Point, said, “We have known Dave North and the Sedgwick CMS management team for many years and were one of the firm’s investors at an earlier stage of their development.”

Stone Point originally exited Sedgwick in 2006 with risk strategy company Marsh & McLennan Companies, who together sold the company for $635m to Fidelity.

The transaction, which sees Stone Point return to the fold, is expected to close this quarter, subject to customary conditions and regulatory approval.

Bank of America Merrill Lynch and Barclays Capital provided financing for the deal.

Stone Point and Hellman & Friedman are private equity firms that both invest in the financial services sector, as well as other industries. They have raised $25bn and $10bn respectively.

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