KKR invests $1bn to become majority stakeholder in USI; plus a deep dive into ICG’s new solar deal

Hello dealmakers.

MK Flynn here with the Wire.

It’s a tough morning, as we remember those lost in the US on this day 22 years ago, as well as those lost in Morocco over the weekend.

We’ll take a moment to acknowledge those losses and then move onto private equity deal news of the day.

This morning, KKR announced a big investment in insurance services.

And we’re taking a Deep Dive into a renewable energy deal from ICG.

Upping the ante
The insurance industry is experiencing a wave of deals, as the once old-fashioned industry gets an update, thanks to new technology.

Today, KKR said that it is making a new equity investment of more than $1 billion in USI Insurance Services, to become the largest single shareholder in the provider of risk management, employee benefits and retirement consulting.

Back in 2017, KKR and CDPQ acquired USI in partnership with the company’s management and employees. Since then, USI has executed numerous growth initiatives and transformative acquisitions, according to the deal announcement. The USI team has more than doubled in size to over 10,000 team members across more than 200 offices.

Under the new deal, KKR and USI will purchase shares held by CDPQ and other investors. More than 50 percent of the shares held by CDPQ will be purchased in the transaction. USI’s management and employees will retain their significant ownership in the company going forward.

“We have a high conviction in the opportunity ahead for this winning team and operating model as USI continues to innovate and scale,” said Chris Harrington, partner at KKR. “Together with CDPQ we have supported significant investments in USI’s platform and technology that position USI for long-term growth.”

Among other recent insurance deals, in August, Goldman Sachs Asset Management agreed to make an investment in World Insurance Associates. In addition to an equity investment alongside Charlesbank, GSAM is leading subordinated debt financing that will support continued acceleration of World’s acquisition strategy and organic expansion. Across both investments, GSAM is investing more than $1 billion into World, which currently has a total enterprise valuation of approximately $3.4 billion.

Solar power
Demand for renewable energy harnessed by solar energy and energy storage in the US and Italy prompted Intermediate Capital Group (ICG), a London-based global asset manager, to invest in Enfinity Global, a Miami-based independent power producer (IPP) seeking to deploy more than 17 gigawatts of solar and storage assets in three continents, ICG managing director of infrastructure Jérôme Sousselier told senior reporter Michael Schoeck, who joined PE Hub as senior reporter last week.

“Both the US and Europe were interesting markets to ICG even before the [August 2022 signing of the] Inflation Reduction Act,” Sousselier said. The IRA, which shores up more than $380 billion in federal subsidies for US renewable energy development, makes Enfinity an even more compelling investment based on a large growth trajectory for the target, he said.

Last week, Enfinity announced a €400 million ($428 million) equity commitment from ICG Infrastructure, making the London-based fund manager the largest shareholder in the management-backed energy developer. Funding for the company came from ICG’s second infrastructure fund.

ICG was referred to Enfinity in 2022 through a connection with a company manager, though the company had been in the market in late 2022 with Barclays as its financial adviser for a Series C growth equity raise, Sousselier said.

More deals
Dealmaking in the renewable energy market picked up steam following the Labor Day weekend, with three announcements involving solar developers as targets, including Enfinity, Michael reports.

On September 7, Soltage LLC sponsor Prudential Private Capital agreed to a sale of a majority interest in the Jersey City, New Jersey-based developer of rooftop commercial and utility-scale solar projects to Igneo Infrastructure Partners for undisclosed terms.

Announced the same day, Houston-based energy investor Quantum Capital Group announced the sale of ConnectGen, also a solar and wind developer based in Houston, for $768 million to Repsol, a Madrid-based energy major that has made two US renewable energy acquisitions to date.

Contact us
Before I sign off, I’d like to encourage you to reach out to us at PE Hub. We’d love to hear from you about upcoming deals, story ideas and insights on PE dealmaking in North America. Here’s how to reach us:

Mary Kathleen (MK) Flynn, Editor-in-Chief: mk.flynn@pei.group
Michael Schoeck, Senior Reporter: michael.s@pei.group
Obey Martin Manayiti, Reporter: obey.m@pei.group
Rafael Canton, Reporter: rafael.c@pei.group
Iris Dorbian, Reporter: iris.d@pei.group

And if you’ve got news on PE deals involving targets, in Europe, here’s how to reach the PE

Hub Europe team:
Craig McGlashan, Editor: craig.m@pei.group
Nina Lindholm, Reporter: nina.l@pei.group
Irien Joseph, Assistant Reporter: irien.j@pei.group

That’s all for today. Craig will be back with more tomorrow.

All the best,

MK