Onex Partners to Acquire Integrated Specialty Coverages from KKR

Business Wire

Transaction Highlights Successful Employee Ownership Model with All Employees to Earn Significant Cash Payouts

NEW YORK & CARLSBAD, Calif.--(BUSINESS WIRE)--
Leading global investment firms KKR and Onex today announced that Onex Partners will acquire Integrated Specialty Coverages ("ISC" or “the Company”), a tech-enabled insurance platform dedicated to designing, underwriting, and distributing insurance solutions. All ISC employees will receive substantial cash payouts on their ownership stakes in the Company.

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ISC employees celebrate news of cash payouts at ownership event

"It’s been an extraordinary journey partnering with ISC’s employees and leadership team, including Founder & CEO Matt Grossberg, who has been instrumental in bringing ownership culture to life and shepherding the Company’s next era of growth and innovation,” said Chris Harrington, Partner at KKR. "Together, we've significantly expanded ISC's market presence, enhanced its product offerings, and accelerated its mission to transform the underwriting and operation of complex insurance programs, creating a best-in-class network that supports the entire insurance ecosystem. This transaction represents a terrific result for ISC's employee-owners and our investors in KKR's Americas XII Fund, underscoring our commitment to serving as a catalyst for growth and value creation."

Since KKR's initial investment in 2021, ISC has scaled into an industry-leading platform driven by targeted investments in technology and data, expansion of its specialty retail and wholesale capabilities, and formation of its first ever national sales and marketing team.

Matt Grossberg, Founder and CEO of ISC, added, "The ownership mindset fundamentally transformed our organization at every level, cultivating an exceptional workforce of true stakeholders. This powerful shift inspired our team of owners to approach their responsibilities with heightened purpose and commitment, knowing they play a firsthand role in the company's success. This alignment of individual and organizational interest has been vital to our achievements during our strategic partnership with KKR. We look forward to our next chapter in partnership with Onex.”

Adam Cobourn, a Managing Director at Onex Partners, said, “We are thrilled to be partnering with Matt Grossberg and all of ISC’s employee-owners in this next phase of the Company’s growth. ISC operates in a market sector that we understand very well, and we see tremendous opportunities to leverage our industry experience and network to help drive value creation. Alignment of interests between all stakeholders is a cornerstone of Onex Partners’ investing philosophy, and we look forward to continuing ISC’s highly successful employee ownership program.”

During its strategic partnership with KKR, ISC has cultivated an entrepreneurial, ownership-oriented culture that has delivered measurable results across the organization:

Employee Engagement: Advanced from the 76th to the 91st percentile in Gallup assessment scores
Ownership Culture: Achieved top-decile performance on the Ownership Works index, with employee ownership sentiment increasing by 23%
Talent Retention: Realized a 50% reduction in voluntary employee attrition since 2022

These outcomes were achieved through targeted workforce development initiatives including training, seminars, and employee-led committees.

As a result of ISC's employee ownership program, all of the Company's nearly 400 employees will receive cash payouts upon closing of the transaction, with payouts ranging from three months to over two years of annual pay, depending on tenure.

"ISC exemplifies the power of ownership cultures in creating value for both employees and companies," said Pete Stavros, Co-Head of Americas Private Equity at KKR and Founder of the nonprofit Ownership Works. “The proof is in the data, which shows that over the last three years, ISC’s ownership culture and engagement scores have risen from the 60s and 70s respectively to the top decile in both, while the quit rate was more than halved from 18% to 6%. ISC will be in great hands with Onex, which shares our commitment to ownership and will continue an employee ownership program at the Company following the close of the transaction.”

Since 2011, KKR has implemented broad-based employee ownership and alignment programs throughout its portfolio, first pioneered by KKR’s U.S. Industrials private equity team and more recently expanding across all control investments within KKR’s Americas Private Equity franchise. To date, 71 KKR portfolio companies have awarded billions of dollars in equity to nearly 180,000 non-senior management employees.

KKR and ISC were advised by Morgan Stanley & Co. LLC as lead financial advisor and Kirkland & Ellis as legal advisor on the transaction.

About ISC

Integrated Specialty Coverages (ISC) is a leading, multi-line program administrator dedicated to underwriting excellence, client service, and customer experience. ISC has built an end-to-end insurance platform by connecting a broad network of insurance markets and distribution channels with proprietary data analytics capabilities. The firm uses sophisticated technology and analytics to revolutionize how complex programs are underwritten and operated. They are joined by experienced professionals from all spheres of the insurance ecosystem. ISC’s strategy is focused on a combination of strategic M&A, data-driven decision-making, and an innovative means of delivery. Please visit: https://iscmga.com/.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

About Onex

Onex invests and manages capital on behalf of its shareholders and clients across the globe. Formed in 1984, we have a long track record of creating value for our clients and shareholders. Our investors include a broad range of global clients, including public and private pension plans, sovereign wealth funds, banks, insurance companies, family offices and high-net-worth individuals. In total, Onex has approximately $55.9 billion in assets under management, of which $8.4 billion is Onex’ own investing capital. With offices in Toronto, New York, New Jersey and London, Onex and its experienced management teams are collectively the largest investors across Onex’ platforms. Onex is listed on the Toronto Stock Exchange under the symbol ONEX. For more information on Onex, visit its website at www.onex.com.