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Carlyle Group (CG) Attains Majority Ownership in Sedgwick

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The Carlyle Group LP (CG - Free Report) announced its plans to fully replace Sedgwick’s current majority shareholder KKR, in a deal valued at about $6.7 billion. The transaction is expected to close sometime later in 2018, on receiving customary regulatory approvals.

Equity portion of the investment will be funded by Carlyle Partners VII, an $18.5-billion fund that focuses on buyout transactions in the United States, and Carlyle Global Financial Services Partners III, L.P., a dedicated financial services buyout fund. Further, Bank of America’s (BAC - Free Report) Merrill Lynch, Morgan Stanley (MS - Free Report) and KKR Capital Markets are expected to provide debt financing for the transaction.

Upon closing of the transaction, Stone Point Capital LLC and Caisse de dépôt et placement du Québec will continue to be minority investors at Sedgwick.

Managing Director and Global Head of Healthcare for Carlyle Group, Stephen H. Wise said, “We are excited to collaborate with Sedgwick, which has distinguished itself by constantly improving the claims management and loss adjusting process to the benefit of all key stakeholders, including its colleagues, customers, insurance companies and brokers.”

Further, President and CEO of Sedgwick, Dave North reflected that both the companies involved will focus on developing new products and solutions for their customers across the globe.

Of late, Carlyle Group seems to be focused on driving growth through inorganic strategies. Recently, it announced the completion of the acquisition of a majority stake in AK Life Sciences, a pharmaceutical company in East Africa. The acquisition is expected to support the investment manager’s expansion into new markets and broaden supplier relationships.

Prior to the above-mentioned acquisition, Carlyle Group had teamed up with Diamondback Energy (FANG - Free Report) to form a joint venture for the development of oil and gas assets in the San Pedro area of Pecos County. Per the deal, it will fund 85% of the development fund program. On achieving some performance milestones under the program, Carlyle Group's working interests will largely be transferred to Diamondback.

The company’s shares have recorded slight gain over the past three months against the industry’s decline of 8.8%. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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