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Canada-based Navacord announces management led buyout

Published 05 July 2018

Canadian insurance brokerage Navacord has agreed for a management led buyout of its minority capital partner with the support of Chicago-based private equity firm Madison Dearborn Partners (MDP).

The partnership with MDP will accelerate Navacord’s organic growth strategy and help support the addition of future broker partners across Canada.

Navacord was created in 2014 with the idea of bringing together like-minded entrepreneurial brokers with the goal of building a Great Canadian Brokerage.

In just four years, Navacord has become a leading national insurance broker with a broad suite of capabilities across commercial property & casualty insurance and employee benefits consulting.

Navacord executive chairman and co-founder Marshall Sadd said: “Navacord’s management team and operating partners are excited about this transaction. MDP is a strong partner with deep insurance services expertise and shares our vision for success and ongoing value creation.

“Their investment in Navacord validates what we have built. We are looking forward to partnering with MDP to deepen our relationships with our clients, create more opportunities for our employees and continue to grow our company.”

Navacord CEO and co-founder Shawn DeSantis said: “We couldn’t be happier with the advancement of our business model over the first four years.

“We have attracted some of the very best commercial brokers in Canada, achieved top-tier organic growth and continue to build out best-in-class talent. Today, Navacord is the fifth largest commercial broker in Canada with 80% of our revenue from commercial insurance and over $700 million in premium.

“Our partnership group is young with an average age of 44. These factors, combined with MDP’s expertise and a strong pipeline of new broker partners looking to join Navacord, positions us to continue our growth story in the years to come.”

MDP Financial & Transaction Services team managing director Vahe Dombalagian said: “We are excited to partner with Navacord.

“With our extensive experience investing in this market sector, we will utilize our resources and expertise to help accelerate Navacord’s growth and achieve significant long-term value appreciation.

“Together with Marshall, Shawn and the rest of the Navacord partnership group we look forward to great success in Navacord’s next stage of growth.”

Terms of the transaction were not disclosed. The transaction is expected to be completed in the third quarter of 2018, subject to customary closing conditions.

Bank of America Merrill Lynch acted as exclusive financial advisor to Navacord. Paul, Weiss, Rifkind, Wharton & Garrison LLP, Felesky Flynn LLP and McBride Wallace Laurent & Cord LLP served as Navacord’s legal advisors. Kirkland & Ellis LLP and Stikeman Elliott LLP served as MDP’s legal advisors.

Source: Company Press Release