Private equity firm Leonard Green & Partners is taking a minority investment stake in insurance broker Hub International, Hub announced in a news release Friday.
Hub declined to disclose how much Leonard Green is investing in Hub or how much of a stake it is taking in the company, saying only that the minority investment was "substantial."
The transaction is expected to close in the third quarter, Hub said.
Hub hailed the transaction as a testament to its rapid growth over the last 10 years. The company today is valued at $23 billion, up more than fivefold from $4.4 billion in 2013 when private equity firm Hellman & Friedman initially invested in the broker.
In 2018, Hub pulled in another private equity investor, Atlas Partners, which took a minority stake.
Hub attributes its growth in part to its expansion into retirement and private wealth and its broadening of employee benefit and human resources services, it said in the news release. Since the company's push into the retirement plan and wealth management business in 2017, Hub has drawn more than 9,200 retirement plans with over $124 billion in assets to its platform.
"Despite the headwinds of the pandemic, interest rate hikes and a global economic downturn, Hub has demonstrated its ability to persevere and excel," said Marc Cohen, Hub's president and CEO, in the news release.
Hub plans to "bring on additional minority investors in the coming months" with the proceeds of these investments used to repurchase equity interests from existing equity holders, Hub said.
Hellman & Friedman will retain a controlling interest in Hub, while the company's management team will continue to hold a significant equity position. Atlas will remain a significant minority shareholder and continue to be members of the board. Leonard Green will be joining the board.
"We have admired Hub for a long time and are excited to partner with the entire Hub management team, Hellman & Friedman, and Atlas to support the next phase of the company's growth," said Adam Levyn, a partner at Leonard Green, in the news release.