CDPQ takes $400m stake in Hyperion

Nicole Tovstiga
06 December 2017

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Quebec-based LP Caisse de dУЉpУДt et placement du QuУЉbec (CDPQ) has acquired a minority stake worth $400m in UK insurer Hyperion Insurance Group.

With the fresh capital, Hyperion intends to continue its growth strategy with several upcoming deals in the pipeline.

Alongside CDPQ, General Atlantic remains invested after acquiring a 33% stake in March 2013. Hyperion management and employees will remain the largest shareholder group.

In addition, Hyperion announced the launch of a debt refinancing, which will extend and reprice its existing term loan facility to 2024 and include the issuance of additional primary debt. It will also extend its existing undrawn revolving credit facility. Along with the capital from CDPQ, this arrangement provides Hyperion with $300m additional capital for future investments.

Since General Atlantic's initial investment in 2013, the insurer's EBITDA increased from £36m to £150m, it said.

Previous funding
Hyperion's first private equity investment came from BP Marsh, which invested £25,000 in Hyperion in 1994. BP Marsh subsequently led a £5.1m funding round for Hyperion that saw Spanish investment firm Murofo Investments SLU inject capital into the business and take an 11.7% stake.

3i invested £50m into Hyperion in 2008, a deal valuing the company at £120m. The firm provided a £31m equity ticket and debt was provided by HSBC, according to unquote" data. BP Marsh retained its 19.5% stake but then reduced its holding to 16% when the firm sold 2.75% to co-investor Murofo Investments for £4.5m in 2011.

General Atlantic bought out 3i's total 22.8% stake in the insurance group in 2013, along with 80% of co-backer BP Marsh's stake, which equated to roughly 11% of all Hyperion shares. BP Marsh remained a shareholder in the company with a 2.76% stake. 3i reaped a money multiple of 3x on the deal.

Company
UK-based Hyperion was founded in 1994 as an insurance broker, but is now an insurance intermediary group with divisions in broking and underwriting. The company employs a staff of 3,800 and has offices in 37 countries.

For the financial year to 30 September 2017 the group reported a preliminary turnover of £535m and EBITDA of £152m.

People
Hyperion Insurance Group – David Howden (CEO).
Caisse de dépôt et placement du Québec – Stephane Etroy (head of private equity).
General Atlantic –John Bernstein (managing director).

Advisers
Equity – Linklaters (legal).
Vendor – Morgan Stanley (financial due diligence); Weil Gotshal & Manges (legal).