Hub International Limited – a leading global insurance brokerage – recently announced that it has successfully completed a substantial minority investment from Leonard Green & Partners, L.P. (LGP) along with several other prominent institutional minority investors. This planned investment from LGP (a Los Angeles-based private equity firm) was announced in April of this year.
The proceeds of this funding will be used to repurchase equity interests from existing equity holders. And H&F will retain a controlling interest in HUB while the company’s management team will continue holding a significant equity position. Altas is going to remain a significant minority shareholder and member of the board and LGP will join the board as well.
The valuation of HUB grew fivefold in the last 10 years. HUB’s valuation was $4.4 billion, and the company had an annual revenue of more than $1 billion in 2013 when Hellman & Friedman (H&F) initially invested in the broker. And in 2018 (just 4.5 years later), HUB’s revenue exceeded $2 billion and the valuation grew to $10 billion in connection with Altas Partners’ substantial minority investment in the company. In 2022, HUB hit $3.7 billion in annual revenue and is valued at $23 billion today.
The growth has been attributed to the ongoing investments the company made in industry and product specialization, digital solutions, brand marketing, broadening of employee benefit and human resources services, expansion into retirement and private wealth, growth in MGA/wholesale capabilities, and more recently expanding complex risk and international solutions. The company will continue investing in these areas along with new initiatives to reflect clients’ changing needs. Plus, HUB remains bullish on its acquisition strategy and is growing its geographic footprint.
Morgan Stanley & Co. served as exclusive financial advisor to HUB; Simpson Thacher & Bartlett LLP served as legal counsel to HUB; and MarshBerry provided market research assistance to HUB. Plus, Barclays acted as exclusive financial advisor and Latham & Watkins LLP served as legal counsel to LGP.
