Canadian Underwriter

SCM Insurance Services announces majority investment from private equity firm Warburg Pincus

August 31, 2017   by Canadian Underwriter

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SCM Insurance Services announced on Thursday that it has received a majority investment from funds affiliated with Warburg Pincus LLC, a global private equity firm focused on growth investing.

The major investment, along with the continued investment in SCM by private equity firm TorQuest Partners, will provide SCM with “access to important capital and strategic resources to continue to invest in and significantly grow its business in Canada and its recent entry into the United States,” SCM said in a press release.

The terms of the transaction are not being disclosed.

SCM reported that previous growth and acquisitions have “significantly increased the range of products and services SCM delivers to its clients. SCM’s ambitious growth plans will see it become an even larger, more diverse company, with a significantly expanded presence to better serve its clients and their customers, supporting their ever-changing needs and challenges,” the release said, noting that SCM’s revenue has grown by three times since the TorQuest acquisition in 2010.

“Along with our teams of experienced professionals, our market-leading technology and our extensive data intelligence, this important investment from Warburg Pincus will help SCM implement the next phase of our successful growth strategy and allow us to serve our clients in even more ways and in more places,” Bob Fitzgerald, CEO of SCM, said in the release. “Warburg Pincus is not only the right partner at the right time for SCM, it is also the right fit culturally and strategically.”

Jeffrey Stein, principal at Warburg Pincus, added that SCM has “established itself as the leading provider of outsourced claims management and tech-enabled insurance services in Canada, and has positioned itself well for further expansion in the U.S.” SCM has already become an “attractive one-stop shop for the P&C industry and we see meaningful opportunity to continue investing in and expanding its service lines,” he said.

In May 2017, SCM made its initial entry into the United States by acquiring Nixon & Company, Inc., providing it with a platform from which to continue building out its service offerings both domestically and into the Lloyd’s of London marketplace. “This U.S. expansion is consistent with SCM’s commitment to expand geographically in line with the needs of its clients who are seeking market-leading offerings in third-party administration and innovative adjusting solutions,” the release said.

Morgan Stanley & Co. LLC acted as financial advisor to SCM in connection with the transaction.

SCM Insurance Services has been servicing the insurance and risk management community for the past 31 years with over 200 locations and 2,900 employees. It is a privately owned provider of claims adjusting, third-party adjusting, risk management, investigative, surveillance, risk mitigation, medical services, forensic engineering services and risk intelligence. The SCM Insurance Services Group of Companies includes ClaimsPro, International Programs Group, Xpera Risk Mitigation & Investigation, Cira Health Solutions, Pario Engineering & Environmental Sciences, SCM Risk Management Services, Opta Information Intelligence and Nixon & Company, Inc.

Warburg Pincus LLC has more than US$44 billion in private equity assets under management. The firm’s active portfolio of more than 140 companies is highly diversified by stage, sector and geography. Founded in 1966, the company has raised 16 private equity funds, which have invested more than US$60 billion in over 780 companies in more than 40 countries. The firm is headquartered in New York, with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore.

Founded in 2002, TorQuest Partners is a Canadian-based manager of private equity funds. With more than $2 billion of equity capital under management, TorQuest is currently investing from TorQuest Partners Fund IV, a $925 million fund that closed in June 2016. TorQuest invests in middle market companies.

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