Pension Fund CDPQ Invests More Than $400M in Hyperion Insurance
Hyperion Insurance Group announced that Caisse de dépôt et placement du Québec (CDPQ), the long-term institutional investor and pension fund, will acquire a significant minority stake in the group.
Investing more than US$400 million in new growth equity, CDPQ will become a long-term growth partner in Hyperion alongside General Atlantic. Hyperion management and employees will remain the largest shareholder group.
Hyperion will 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.
The CDPQ investment and the debt raising “will leave Hyperion well placed to execute on its medium term growth strategy from a strongly capitalized position,” providing more than US$300 million of additional capital for the company’s global growth strategy and investments, the company said in a statement.
“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,” Hyperion said.
“CDPQ is a fantastic partner to support us on the next leg of our journey,” commented David Howden, CEO of London-based Hyperion.
CDPQ has a deep understanding of insurance markets and a significant international portfolio, which means it 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 added.
“Since General Atlantic’s initial investment in 2013, the group’s revenue has grown by almost five times…,” Howden said, noting that the company’s earnings before interest, tax, depreciation and amortization (EBITDA) has increased from £36 million ($48.5 million) to more than £150 million ($202.1 million).
“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.”
“We are pleased to partner alongside David Howden, his management team and General Atlantic to continue Hyperion’s track record of success,” said Stephane Etroy, executive vice president and head of Private Equity at CDPQ.
“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,” she continued.
Morgan Stanley & Co LLC acted as financial adviser to Hyperion and General Atlantic for the transaction and Weil, Gotshal & Manges served as legal adviser. Linklaters LLP served as legal adviser for CDPQ.
The equity transaction is subject to regulatory consents.
Hyperion is a leading international, employee owned insurance group. It comprises broking divisions Howden and RKH, and underwriting division DUAL. Hyperion’s businesses operate across Europe, Asia, the Middle East, Latin America, the U.S., Australia and New Zealand, employing over 3,800 people in 37 countries.