04 December 2017
Transaction and debt raise will provide over US$300m of additional capital for global growth strategy.
Hyperion Insurance Group today announced that Caisse de dépôt et placement du Québec (CDPQ), the long-term institutional investor, has agreed to acquire a significant minority stake in the Group.
CDPQ will invest more than US$400m to provide new growth equity as well as liquidity to existing shareholders. CDPQ will join Hyperion as a long-term growth partner alongside General Atlantic. Hyperion management and employees will remain the largest shareholder group.
For the financial year ended 30 September 2017 the Group reported preliminary unaudited revenue of £535m and EBITDA of £152m on a bank reported basis.
Hyperion will, tomorrow, also launch a debt refinancing, which will extend and reprice its existing Term Loan facility to 2024 and include the issuance of additional primary debt. In addition, Hyperion will extend its existing undrawn Revolving Credit Facility. In conjunction with the CDPQ investment, this will leave Hyperion well placed to execute on its medium term growth strategy from a strongly capitalised position and with significant free cash, providing over US$300m of additional capital for future investments.
Selective acquisitions with a strong cultural fit will continue to play an important role in Hyperion’s growth strategy and the Group has a number of deals in the pipeline.
David Howden, CEO of Hyperion, commented: “CDPQ is a fantastic partner to support us on the next leg of our journey. Their strategy to invest based on long term fundamentals combined with their deep understanding of insurance markets and significant international portfolio, mean they will deliver valuable insight to help direct our future plans, whilst remaining supportive of our independence and of our resolute focus on putting our clients at the centre of everything we do.”
He continued: “Since General Atlantic’s initial investment in 2013, the Group’s revenue has grown by almost five times, our EBITDA has increased from £36m to over £150m, and we have created very significant value for all of our shareholders. GA has been more than just an investor, it has been an active and collaborative growth partner whose intellectual capital, significant technological expertise, global resources and experience have played a central role in our success over the past four years, and I am delighted that they will continue to do so.”
Stephane Etroy, Executive Vice-President and Head of Private Equity at CDPQ, commented: “We are pleased to partner alongside David Howden, his management team and General Atlantic to continue Hyperion’s track record of success. Hyperion has a very strong entrepreneurial culture that has consistently yielded superior organic growth. This transaction allows us to support the Group in its global growth strategy while at the same time benefiting from a stable and counter-cyclical industry, together with a high-quality partner who shares our long-term vision.”
John Bernstein, Managing Director and Co-Head of EMEA, General Atlantic, said: “Over the last four years we have enjoyed a strong working relationship with Hyperion over a period in which the Group has delivered market-leading organic growth, a transformational merger with RKH, and significantly invested in embracing technology and transforming its operational platform. This unique group has a bright future and we look forward to working with CDPQ and Hyperion as it continues its rapid growth in the provision of leading insurance services to its customers globally.”
Morgan Stanley & Co LLC acted as financial advisor to Hyperion and General Atlantic for the transaction and Weil, Gotshal & Manges served as legal advisor. Linklaters LLP served as legal advisor for CDPQ.
The equity transaction is subject to regulatory consents.
The Board expects to approve Hyperion’s FY17 consolidated audited accounts shortly.
Hayley Langston / Marion May
T: +44 (0)20 7648 7144