Private equity firm HGGC has closed its first financial services investment, a deal for a stake in Pearl Holding Group.
Pearl, headquartered in Sunrise, Florida, provides underwriting, policy management, claims processing and other services to about 400 insurance agencies. The company manages more than $100 million in net premiums for about 70,000 active insurance policyholders.
Pearl’s owners, Jared Perlin and Stacey Perlin Labell, will retain significant ownership stakes and continue running the business. Terms of the deal were not disclosed. HGGC managing directors Greg Benson and Gary Crittenden will join Pearl's board of directors.
Palo Alto, California-based HGGC looks for deals where it can partner with founders and existing management teams.
The deal is HGGC’s first financial services investment, and the firm’s third platform investment out of its second fund. In March, the firm invested in Serena Software, a software company that aims to streamline information technology processes, and in April, invested in AutoAlert, a cloud-based software for car dealers.
HGGC’s other recent deals include a $725 million acquisition of the aftermarket services business of Jabil Circuit Inc. (NYSE: JBL).Before that, in February, HGGC picked up Buy4Now Technology Group to add to portfolio company MyWebGrocer Inc.
Estabrook Advisors acted as Pearl’s financial adviser on the deal, while Posternak Blackstein & Lund LLP provided legal advice. Kirkland & Ellis LLP provided legal advice to HGGC.
The insurance industry has been consolidating for several years. Recent transactions include Hub International Ltd.’s acquisition of Peterson Milaney Insurance Associates Inc. and Confie Seguros’ deal for three insurance brokerages.