HGGC said Jan. 23 that it agreed to sell a minority stake in in Davies Group Ltd to to Alberta Investment Management Corp. Financial terms weren’t announced. Davies, of London, provides claims solutions, insurance services and customer experience programs to customers in highly regulated markets, including insurance, financial services, utilities, and communications.
HGGC to Sell Minority Interest in Davies Group to AIMCo
Specialist Operations, Consulting & Digital Solutions Business More Than Doubles Revenues in Less than Two Years
PALO ALTO, Calif.— January 23, 2019— HGGC, a leading middle-market private equity firm, today announced it has reached a definitive agreement to sell a minority stake in Davies Group Ltd. (“Davies” or “the Company”), a UK-based tech-enabled operations management, consulting and digital solutions provider, to Alberta Investment Management Corporation (“AIMCo”), on behalf of certain of AIMCo’s clients. The investment in Davies will diversify and strengthen the Company’s shareholder base as Davies seeks to drive continued organic growth and expansion in the years ahead. HGGC will continue to hold the majority ownership stake in the Company.
Davies is the go-to specialist operations, consulting and digital solutions partner for organizations in highly regulated markets, including insurance, financial services, utilities, and communications, as well as to regulatory bodies and other global businesses. Headquartered in London, Davies provides claims solutions, insurance services and customer experience programs to more than 400 clients from its operations in the UK, Ireland, Bermuda, and North America.
HGGC originally invested in January 2017 and has taken a collaborative approach to ownership that has provided Davies with the financial and strategic resources to continue its strong organic growth path. Since HGGC’s investment, Davies has acquired and integrated 11 complementary businesses, including five in 2018, to its growing platform and invested in new technology that improves its client value proposition and operational efficiencies. The Company has more than doubled annual revenues in less than two years to $150 million.
“From the start, our investment in Davies has been emblematic of HGGC’s philosophy of acquiring compelling platforms and providing them with the resources and value-added expertise to drive growth,” said John Block, Principal at HGGC. “We’re extremely proud to have partnered with Davies Group CEO Dan Saulter and his team to guide the Company’s impressive trajectory and we look forward to partnering with AIMCo to sustain and elevate this success.”
Over the course of 2018, Davies has added more than 100 new accounts from existing and new clients to its growing platform.
“HGGC has exceeded our expectations for an investment partner,” said Saulter. “The team’s strategic guidance and support has been invaluable. Over the past two years, we have tripled our annual investment in technology and digital transformation, continued to invest heavily in our people, and have significantly diversified our services and solutions for our more than 400 insurance, highly regulated and global clients. We are excited to begin working with AIMCo, who will not only be a source of long-term capital, but also a value-added partner as we cement Davies’ place as the leading operations, consulting and digital partner in our chosen verticals.”
“Davies Group’s incredible progress shows that Dan and his team have cracked the code on what it means to be a successful enterprise in complex markets,” added Rich Lawson, CEO and Co-Founder at HGGC. “We’re thrilled to have the opportunity to take advantage of Davies’ success to return capital back to our investors, and at the same time, partner with AIMCo to ensure the Company has ample capital for continued growth.”
“AIMCo is excited to be partnering with Dan and his team, alongside HGGC, to support Davies in its next phase of growth. We believe the Company has a strong runway ahead along with an excellent leadership team and investor partners to capitalize on growth opportunities,” said James Ridout, a Director in the Private Equity group at AIMCo.
The transaction is subject to receipt of customary regulatory approvals and is expected to close within Q2 of 2019. Concurrent with the equity transaction, Davies finalized financing arrangements with ICG and Permira Debt Managers.