KKR Sells USI to Aon for $17 Billion

In a significant move within the insurance brokerage sector, KKR has agreed to divest its stake in USI Insurance Services to Aon for a substantial $17 billion. This transaction marks the culmination of a nearly decade-long investment for KKR, highlighting a successful exit that underscores the firm's value creation strategy.

The all-cash acquisition values USI at approximately 6 times the equity KKR initially injected in 2017. This exit is projected to yield roughly $3.3 billion in after-tax proceeds for the private equity giant, a testament to the growth and strategic development of USI under its ownership. This deal is particularly noteworthy for KKR's Strategic Holdings segment, a portfolio designed for long-term, durable assets, with USI representing its inaugural core private equity investment.

KKR's journey with USI began in 2017 when it partnered with Caisse de dépôt et placement du Québec to acquire the company from Onex for approximately $4.3 billion. Over the years, KKR progressively increased its commitment, notably acquiring a majority of CDPQ's stake in 2023 and further bolstering its position in subsequent years. This strategic accumulation of ownership facilitated a period of aggressive expansion for USI.

Under KKR's stewardship, USI nearly tripled its revenue, driven by a dual strategy of organic expansion and over 90 strategic acquisitions. These acquisitions broadened the company's service offerings, geographic footprint, and operational capabilities. The firm's financial performance saw robust growth, with Adjusted Revenues and Adjusted EBITDA compounding annually at approximately 12% and 13%, respectively. Furthermore, KKR supported significant investments in technology, data analytics, and artificial intelligence, alongside a doubling of the USI workforce.

The acquisition by Aon, a global leader in professional services, is expected to enhance its reach into the mid-sized corporate client segment. This follows Aon's recent acquisition of NFP from Madison Dearborn Partners and HPS Investment Partners for approximately $13.4 billion. USI, currently the tenth-largest insurance broker in the U.S. with around $3 billion in annual revenue, will see its Chairman and CEO, Sicard, lead Aon's middle-market operations.

This divestiture by KKR aligns with a broader trend of increased M&A activity, providing private equity firms with opportunities to realize value from their portfolios. The firm has reported a strong second quarter with record profits, bolstered by several successful exits, including the sale of semiconductor equipment maker Kokusai Electric, which generated a remarkable 20x return. The USI transaction is anticipated to close in the fourth quarter of 2026, subject to regulatory approvals.