Abry Partners bought into Hilb in 2015, taking on the stake previously held by another private equity firm, with management retaining a stake in the business.
Richmond, Virginia-based Hilb now generates earnings before interest, tax, depreciation and amortization (EBITDA) of around $75 million, according to sources who spoke on condition of anonymity as the information isn’t public.
Brokerages traditionally attract valuations of around 13-15 times EBITDA, which if achieved in this sale would value Hilb at between $975 million and $1.1 billion.
Boston-based Abry declined to comment. Hilb didn’t respond to a request for comment.
Buyout firms have invested heavily in the insurance brokerage space in recent years, often with the aim of growing the portfolio company through buying smaller firms in an industry which is still largely fragmented.
Hilb has announced 18 such acquisitions so far in 2019, according to its website. In total, Hilb has 85 offices spread across 21 states.
Insurance brokerages also produce consistent cash flows, which private equity firms like, although stagnating premium growth among insurers, which feeds through into commission payments to brokers, is a challenge facing the sector.