HPS to invest in insurance broker NFP

HPS Investment Partners has agreed to acquire a “substantial” minority stake in NFP, an insurance broker. No financial terms were disclosed. When the deal closes, Madison Dearborn Partners will retain its controlling stake in NFP along with the company’s management and staff. The deal is expected to be completed in the first quarter of next year. BoA Merrill Lynch is providing financial advice to NFP on the transaction while Barclays is doing likewise for MDP.

PRESS RELEASE

NEW YORK–(BUSINESS WIRE)–NFP (NFP or the Company), a leading insurance broker and consultant that provides employee benefits, property & casualty, retirement and individual private client solutions, announced today that it has entered into a definitive agreement with HPS Investment Partners, LLC (HPS), a leading global investment firm, whereby HPS will make a substantial minority investment in NFP. Upon the closing of the transaction, Madison Dearborn Partners (MDP), a leading private equity firm that took a control equity ownership position in NFP in 2013, will maintain a controlling stake in NFP, alongside NFP’s management and employees.

The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2017. Terms were not disclosed.
“HPS’s investment in NFP is a further validation of the quality, performance and future opportunity of our business,” said NFP Chairman and Chief Executive Officer Douglas Hammond. “Partnering with these two outstanding investors provides us with tremendous intellectual and capital flexibility to further advance our growth initiatives and solidify our position as a world-class, diversified insurance brokerage and consulting leader. With the support of MDP and HPS, we will continue building on our momentum by investing in client-centric resources to create best-in-class products and services, while also supporting our PeopleFirst initiative, which creates an outstanding professional environment for our valuable employees.”

The partnership with MDP and HPS provides substantial capital resources to support NFP’s growth. Douglas Hammond will continue to serve as Chairman and Chief Executive Officer of NFP and will remain the Company’s largest individual shareholder.

Scot French, Partner at HPS, said, “We are pleased to join MDP as an investor in NFP and to work alongside the Company’s experienced and talented management team. We are looking forward to partnering with MDP and NFP to support the Company’s growth over the long term.”
Vahe Dombalagian, a Managing Director at MDP and head of the firm’s Financial and Transaction Services team, said, “We have an excellent working relationship with HPS, and we are pleased to have them join MDP as our partner in NFP. Together, we will utilize our combined expertise and resources in partnership with NFP’s outstanding leadership team to support NFP’s growth and build a strong, diversified business as we execute on our long-term vision for the Company.”

BoA Merrill Lynch is serving as the exclusive financial adviser to NFP. Barclays is serving as exclusive financial adviser to MDP. Ropes & Gray LLP is serving as legal advisor to MDP and NFP, and Fried, Frank, Harris, Shriver & Jacobson LLP is serving as legal advisor to HPS.

About NFP
At NFP Corp., our solutions and expertise are matched only by our personal commitment to each client’s goals. We’re a leading insurance broker and consultant that provides employee benefits, property & casualty, retirement and individual private client solutions through our licensed subsidiaries and affiliates.

NFP has more than 3,400 employees and global capabilities. Our expansive reach gives us access to highly rated insurers, vendors and financial institutions in the industry, while our locally based employees tailor each solution to meet our clients’ needs. We’ve become one of the largest insurance brokerage, consulting and wealth management firms by building enduring relationships with our clients and helping them realize their goals.
Recently NFP was ranked the 2nd fastest-growing US large-group employee benefits broker by Employee Benefit Adviser. In addition, Business Insurance ranked us as the 5th largest global benefits broker by revenue, the 4th largest US-based privately owned broker and the 11th largest broker of US business. PlanSponsor ranked us the 5th largest executive benefits provider of nonqualified deferred compensation by number of plans, and we were ranked 11th in personal lines P&C revenue by Insurance Journal.

For more information, visit NFP.com.

About Madison Dearborn Partners
Madison Dearborn Partners (MDP), based in Chicago, is a leading private equity investment firm in the United States. Since MDP’s formation in 1992, the firm has raised seven funds with aggregate capital of approximately $23 billion and has completed approximately 130 investments. MDP’s seventh fund recently held a final close on $4.4 billion. MDP invests in businesses across a broad spectrum of industries, including financial and transaction services; business and government services; health care; telecom, media and technology services; basic industries; and consumer. Noteworthy financial and transaction services investments include Ankura Consulting Group, EVO Payments International and Towergate Insurance Limited. For more information, please visit www.mdcp.com.

About HPS
HPS Investment Partners, LLC (“HPS”) is a leading global investment firm. Established in 2007, HPS has approximately 100 investment professionals and over 200 total employees, and is headquartered in New York with ten additional offices globally. HPS was originally formed as a unit of Highbridge Capital Management, LLC, a subsidiary of J.P. Morgan Asset Management, and formerly known as Highbridge Principal Strategies, LLC. In March 2016, the principals of HPS acquired the firm from J.P. Morgan. As of September 2016, HPS had approximately $33 billion of assets under management.