KKR & Co. agreed to buy Global Atlantic Financial Group in a deal that gives it a major presence in the insurance industry and adds long-term capital.
The alternative-investment manager will acquire closely held Global Atlantic’s outstanding shares, in a transaction that could be valued at more than $4 billion.
Global Atlantic, which was founded within Goldman Sachs Group Inc. in 2004 and became independent in 2013, had more than 2 million policyholders through its retirement and life insurance products and almost $70 billion in invested assets as of March 31.
KKR’s rivals have been building out their own insurance arms in recent years and have brought on executives who can help them attract more business.
“This is a transformative event for KKR,” said Henry Kravis and George Roberts, co-chief executive officers of the New York-based firm. “Our businesses are complementary and our partnership will benefit all of our collective stakeholders.”
KKR will pay the insurer’s book value at the date of closing, subject to an “equity roll-over” for certain existing shareholders, according to the statement. Global Atlantic’s book value was about $4.4 billion at the end of March.
The deal “builds KKR’s scale in insurance and offers cross-pollination opportunities for investment strategies at both entities,” David Havens, a credit analyst at Imperial Capital LLC, said Wednesday in a note. The move is “pretty much in line with the playbook Apollo’’.