It’s confirmed and it’s official. Private equity firm BC Partners has today announced its acquisition of a majority stake in the London-based insurance services company Davies. The new partnership will seek to diversify and strengthen Davies’s shareholder base and drive further global expansion, while increasing investment in digital transformation and strengthening its partnerships with complementary businesses via M&A.
Existing investors HGGC and AIMCo will continue to hold minority ownership stakes in the business, alongside the Davies leadership team and employees and BC Partners will have representation on the board. Terms of the transaction were not disclosed but an unidentified source informed Bloomberg that the transaction values Davies at around £1.2 billion (around $1.66 billion), including debt.
The transaction is subject to receipt of customary regulatory approvals and is expected to close during the second quarter of 2021.
Davies, which delivers professional services and technology solutions across the risk and insurance value chain, supports insurers, reinsurers and brokers in assessing and managing claims. The business employs more than 4,000 people, supporting about 800 clients worldwide and has recently undergone global expansion into new markets including Bermuda, Canada and the US. Through a mix of organic growth and strategic acquisitions, the firm has increased its annual proforma revenues six-fold over the last four years, to over £350 million.
Commenting on the deal, partner at BC Partners Cédric Dubourdieu said the firm had been watching Davies’s progression over the last few years with interest and believes the business has serious potential. He referenced Davies’s successful geographical expansion and its completion of over 30 acquisitions which had helped diversify its service offering and cement its reputation in the sector.
“We’re very excited about the opportunity to work with Dan [Saulter, group CEO of Davies] and the broader Davies team to build on this momentum,” he said, “using our global network and sector expertise to support further growth through technology-enabled transformation and further penetration into the US and European markets.”
Meanwhile, Saulter said the Davies team is excited to welcome BC Partners as a majority investor as the group embarks on its next phase of international growth and technology investment. He said he is pleased that HGGC and AIMCo will continue to invest in the business alongside its new partner.
“I am proud of what the team has achieved,” he said, “and this transaction will mean that our employee ownership programme, the Davies Incentive Plan, will pay out to eligible colleagues for a second time, reflecting the huge role they play every day in serving our 800+ insurance and highly regulated clients around the world.”
James Ridout, director of AIMCo said it had been great to partner with Saulter and the Davies team since 2019 and that, as long-term investors on behalf of its clients, AIMCo was delighted to continue backing the business and looks forward to supporting its next growth phase.
John Block, partner of HGGC added: “The amazing growth Davies has achieved since our initial investment in 2017 has been inspiring to see. Dan and the leadership team’s commitment to maintaining a culture of accountability and transparency with a focus on value creation provides a great foundation for continual business expansion. Following our partnership model, we look forward to an ongoing role in Davies’s success alongside BC Partners and AIMCo.”
The BC Funds were advised by Waller Helms Advisors and Macquarie Capital, Linklaters LLP and PwC. Management were advised by Liberty Corporate Finance and Osborne Clarke. HGGC was advised by Kirkland & Ellis and AIMCo was advised by Allen & Overy.
