Alberta Investment Management Corp (AIMCo) has agreed to acquire a minority stake in Davies Group, a London-based provider of claims solutions, insurance services and customer experience programs to clients in highly regulated markets.
Terms weren’t released for the deal, which is expected to close in the second quarter.
The seller of the interest is U.S. mid-market private equity firm HGGC. HGGC invested in Davies two years ago and will continue to be its majority shareholder.
James Ridout, a director in AIMCo’s private equity group, said the Canadian pension fund will help Davies capitalize on additional global growth opportunities.
Canadian investor AIMCo acquires minority stake, as Davies begins next phase of international growth and continued digital transformation, alongside existing investor HGGC
January 23, 2019
Davies today announced that Canadian investor, Alberta Investment Management Corporation (“AIMCo”), on behalf of certain of its clients, has signed a definitive agreement to acquire a minority stake in the fast-growing operations and digital solutions provider. The new partnership will diversify and strengthen the shareholder base as Davies seeks to drive continued organic growth and digital transformation. HGGC will continue to hold the majority ownership stake in the business.
Since HGGC took a majority stake in January 2017, Davies has delivered double-digit annual organic growth and has completed 11 targeted acquisitions which has deepened and diversified its offering to clients, as well as expanding its global reach, adding operations in Bermuda, the US and Canada to its established UK & Ireland bases.
Over the course of 2018, Davies repositioned the business across three core segments: Claims solutions, Insurance services and Customer solutions and added more than 100 new accounts from existing and new clients to its growing platform.
Davies has more than tripled its annual investment in technology and digital transformation, including in its Cq claims administration platform, its video and drone claims handling solutions, as well as investing in robotics and machine learning. In addition, in 2017 Davies launched its “Disruptive Thinking” innovation lab, placing the power of new ideas in the hands of its people; setting aside significant capital to commercialise its best ideas to continue to solve business challenges for its 400+ insurance, highly regulated and global clients.
Dan Saulter, Group CEO of Davies said: “We have ambitious plans for Davies over the next five years both in our home markets and internationally. The new investment from AIMCo is due to the excellent work and progress our team at Davies has made in recent years. With support from HGGC and AIMCo we can continue to back new technologies and invest in our team of 1,700 colleagues across the business. We’re excited to welcome AIMCo as a Davies investor who we believe will be a valuable partner as we cement Davies’ place as the leading operations, consulting and digital partner in our chosen markets.”
“After two years of impressive growth driven by continued commitment to the ever-expanding Davies team and the great clients we serve, we are excited to bring in AIMCo as a new investor” said John Block, Principal at HGGC. “We are committed to continuing to back the investments in the team and technology as we dedicate the coming years to continued global expansion and to adding capabilities to better serve Davies growing client base.”
“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, Director in the Private Equity group at AIMCo.
The transaction is subject to receipt of customary regulatory approvals and is expected to close during the second quarter of 2019. Concurrent with the equity transaction, Davies finalised financing arrangements with ICG and Permira Debt Managers.
Source: Davies Group