HGGC Announces Sale of Minority Stake in Davies Group

HGGC, a private equities firm with cumulative capital commitments totaling over $4.3 billion, announced its agreement to sell a minority stake in Davies Group Ltd. on Wednesday, January 23, 2019. Alberta Investment Management Corporation (AIMCo) is the new partner, and their investment will help strengthen and diversify Davies shareholder base as they continue their expansion. A majority ownership stake will continue to be held by HGGC.

When HGGC acquired Davies Ltd., it was part of their larger strategy of scouring the business landscape for promising companies with potential for organic growth. Davies appeared to fit the bill. A sound business in a non-cyclical market, the digital solutions business specialized outsourced insurance services in highly regulated markets. With the right partner, providing financing and resources, rapid growth was possible. HGGC, a mid-market equities group, took on the role using a cooperative approach that allowed the company to follow its growth plan with little interference.

HGGC’s collaborative partnership with Davies has paid off. Since its initial investment in January 2017, Davies has acquired eleven additional business in under two years. This rapid expansion has led to the company doubling its annual revenues to over $150 million. CEO and Co-Founder of HGGC Rich Lawson expressed admiration for the incredible progress Davies has made in complex markets, saying that Dan Saulter, CEO of Davies Group, “seems to have cracked the code on what it means to be a successful enterprise” in those markets.

The sale to AIMco will improve the financial position of both companies. James Ridout of the Private Equity division of AIMco cited Davies excellent leadership team and growth opportunities as motivation for the partnership. Financial arrangements with Permira Debt Managers and ICG have been finalized. The sale is subject to customary regulatory approvals and is expected to be completed during the second quarter of 2019.