CVC Capital Partners will take a majority stake in Cunningham Lindsey Group, a loss adjusting and claims management firm, the firm announced Monday. Terms of the recapitalization were not released. In 2007, Stone Point Capital acquired a majority interest in Cunningham Lindsey via a public-to-private transaction, with Fairfax Financial Holdings, the company said in a press release. Going forward, Stone Point and Fairfax will remain “substantial and active shareholders,” the company said.
Cunningham Lindsey Group Limited (“Cunningham Lindsey” or the “Company”), the leading global loss adjusting and claims management firm, and a CVC Capital Partners (“CVC”) led investor group including Allied World Financial Services, Ltd announced they have agreed to a recapitalization by which funds affiliated with CVC will acquire majority ownership of Cunningham Lindsey. Founded more than one hundred years ago, Cunningham Lindsey has grown organically and through acquisitions into the largest loss adjusting and claims management firm globally with a network of approximately 7,000 people operating in 61 countries. In 2007, affiliates of Stone Point Capital (“Stone Point”) acquired a majority interest in the Company via a public-to-private transaction, with Fairfax Financial Holdings (TSX: FFH) (“Fairfax”) retaining a substantial ownership position.
Following the CVC recapitalization, the existing Cunningham Lindsey management team, led by Chief Executive Officer Philippe Bès, will continue to manage the Company, and Mr. Bès will join the Company’s board of directors. Stone Point and Fairfax, along with the Company’s management team, will remain substantial and active shareholders, supporting Cunningham Lindsey as it enters the next phase of execution of its global growth strategy.
“We are excited to welcome CVC as our new majority investor,” commented Cunningham Lindsey CEO Philippe Bès. “CVC shares our vision for the future expansion of Cunningham Lindsey, and together with our long-standing partners Stone Point and Fairfax, will enable us to continue to expand and enhance our position in the key insurance markets. CVC’s diversified international coverage will be a tremendous asset to capitalize on as we broaden our global presence supporting the unique capabilities and expertise that our clients need.”
Kamil Salame, CVC Partner and Head of the U.S. Financial Institutions Group, commented, “Cunningham Lindsey is recognized as the best-in-class provider of loss adjusting and claims management services to the global insurance market. We look forward to bringing our global network and resources to the Company and working with its highly-regarded leadership team and existing investors to build upon all that they have accomplished.”
“Cunningham Lindsey has experienced significant growth in revenue and profitability since our initial investment in 2007,” said Charles A. Davis, Chief Executive Officer of Stone Point Capital. “We want to thank Fairfax and its CEO Prem Watsa for choosing us to be their partners in this investment. We also want to thank Cunningham Lindsey’s management team for the outstanding performance that it has delivered. We are excited to remain as a continuing equity owner alongside Fairfax and CVC, two firms that we have known and respected for many years.”
Completion of the transaction is subject to certain customary closing conditions, including, among other things, regulatory approvals.
Cunningham Lindsey was advised on the transaction by BofA Merrill Lynch and Debevoise & Plimpton LLP. The CVC led investor group was advised by Willis Capital Markets and Advisory, Weil, Gotshal & Manges LLP and Clifford Chance. BofA Merrill Lynch, Morgan Stanley Senior Funding, Inc., RBC Capital Markets and UBS provided fully committed financing to CVC.
About Cunningham Lindsey
Cunningham Lindsey is a leading provider of independent loss adjusting and claims management services worldwide. In addition to its core loss adjusting services, Cunningham Lindsey provides engineering consultancy, risk management, risk survey, environmental remediation consultancy, valuation and related services. Cunningham Lindsey’s global network consists of approximately 7,000 people in 61 countries worldwide.
About CVC Capital Partners
CVC is one of the world’s leading private equity and investment advisory firms. Founded in 1981, CVC today has a network of 20 offices and some 250 employees throughout Europe, Asia and the US. Currently, CVC manages funds on behalf of over 300 investors from North America, Europe, Asia and the Middle East, who entrust their capital to CVC for periods of 10 years or more. Raised from pension funds, financial institutions and various other partners, CVC Funds seek to identify attractive investments and develop sustainable, long-term value in close partnership with management teams. To date, CVC has raised over US$44 billion from a diverse and loyal investor base, completing over 290 investments in a wide range of industries and countries across the globe, with an aggregate transaction value of US$167 billion.
CVC has significant experience in financial services investments, and its dedicated Global Financial Institutions Group focuses on investing in leading financial businesses across North America, Europe and Asia. CVC has a number of portfolio companies in the financial institutions sector, including Acromas Holdings (UK finance, motoring and leisure services provider), Avolon (global commercial aircraft lessor), Brit Insurance (Lloyd’s-based global insurance and reinsurance provider), Fraikin (European commercial vehicle operational leasing company), Raet (Netherlands payroll processor), RCBC (Philippines commercial bank), and Sun Hung Kai (Hong Kong retail brokerage house and consumer finance company).
About Fairfax Financial Holdings
Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged primarily in property and casualty insurance and reinsurance. Fairfax’s principal operating subsidiaries are Northbridge Financial Corporation, Crum & Forster, Zenith and Odyssey Re. Its common shares are listed on the Toronto Stock Exchange under the symbol FFH.