HGGC, a leading middle-market private equity firm located in Palo Alto, California, announced that it was selling its minority stake in Davies Group Limited to Alberta Investment Management Corporation (AIMCo), a high-performing Canadian investment manager.
In the interest of some of AIMCo’s clients, the company has signed a definitive agreement solidifying its position to obtain the minority stake, and the transaction will conclude during the second quarter of 2019.
HGGC initially invested in Davies Group in January 2017 and will continue to hold its majority ownership stake in the company. “We’re extremely proud to have partnered with Davies Group CEO Dan Saulter and his team to guide the company’s impressive trajectory, and we look forward to partnering with AIMCo to sustain and elevate this success,” said John Block, Principal at HGGC.
Davies Group is a tech-sophisticated special operations, digital solutions, and consulting provider for highly regulated markets such as insurance, finance, utilities, and communication. The UK-based company is confident that the partnership between HGGC and AIMCo will ensure its continued growth and expansion.
“HGGC has exceeded our expectations for an investment partner,” Saulter said. Since the initial investment that HGGC made in 2017, Davies has seen its annual revenue at least double to $150 million while also experiencing phenomenal organic growth and digital transformations.
Davies has since had 11 targeted acquisitions, added over 100 new accounts from existing and new clients in 2018 alone, and expanded its reach to Bermuda, the United States, and Canada. It also had more time to make investments in its Cq claims administration platform, video and drone claims handling solutions, robotics, and machine learning.
“From the start, our investment in Davies has been emblematic of HGGC’s philosophy of acquiring compelling platforms and providing them with the resources and value-added expertise to drive growth,” said Block. Its philosophy is why HGGC also invested in AutoAlert, who is causing a technology disruption in the automotive industry. AutoAlert is a software platform that uses customer data to help sales representatives determine who is a good buyer and what type of vehicle they are likely to prefer. AutoAlert’s approach is similar to how Davies Group is disrupting the insurance industry by increasingly investing in and producing new ways to utilize technology.
“We have ambitious plans for Davies over the next five years both in our home markets and internationally,” said Saulter. “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.”
With the financial and strategic support from HGGC and AIMCo, the partnership forming between the three companies in support of Davies’ continued success will undoubtedly lead to increased development in the InsurTech industry.