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North Bay Business Journal

Thursday, November 14, 2013, 4:36 pm

Carlyle acquires majority stake in EPIC

$185 billion under management; looking for growth

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    PETALUMA — The Carlyle Group, a Washington D.C.-based asset manager, has acquired a controlling equity stake in San Francisco-based EPIC Insurance, which has a Petaluma branch that is home to some of the North Bay’s most senior insurance brokers.

    EPICFinancial terms of the investment, which is subject to customary regulatory approvals and is expected to close at year-end, were not disclosed.

    With the financial backing of Carlyle, EPIC — short for Edgewood Partners Insurance Center — said it will now focus on “strategic growth” though acquisitions across the North Bay while also growing a national footprint.

    EPIC had total premium volume of more than $809 million, with more than $494 million in property-casual and nearly $385 million in employee benefits, as of October 2013, according to Vice President Linda Soo Hoo.

    EPIC’s North Bay branch had $60 million in premium volume in 2012 — a number it hopes to double within three years. The company as a whole has about $80 million in annual revenue — a number it hopes to triple within five years, spokesman David Hock told the Business Journal.

    “In the North Bay, we are actively seeking potential M&A partners and individual broker and producers who are looking for an opportunity to grow their operations locally,” he said. “Strategically, EPIC will continue building on our established platforms in the North Bay and across California but will also look east to replicate in other key regions what we’ve done here in the Golden State.”

    The Carlyle Group stressed that the company will maintain business as usual, with the same management and board of directors. It will remain focused on brokerages services in in employee benefits, real estate, hospitality, construction, renewable energy and other industries.

    EPIC was founded in 2007 by John Hahn and Dan Francis in San Francisco with funds managed by Greenwich, Conn-based Stone Point Capital.

    Longtime North Bay brokers Bill Merget and Mike Ryan launched the Petaluma branch in July 2010. They were formerly of Wells Fargo Insurance Services and ABD Insurance and Financial Professionals. Victor McKnight from Sitzmann Morris & Lavis joined them later.

    “We are extremely excited to have The Carlyle Group as this new investor, strategic partner and source of significant fresh capital” Mr. Ryan said. “Carlyle’s belief and investment will allow EPIC to remain private while we further expand our operations, both in California and across the country.” 

    Post closing, funds managed by Stone Point and EPIC employees will remain substantial investors in the company, although an exact percentage was not provided.

    EPIC has more than 300 employees operating from 10 offices across California, Denver and New York. EPIC ranks among the top 40 retail insurance brokers in the U.S.

    Carlyle has $185 billion of assets under management across 122 funds and 81 fund of funds vehicles as of Sept. 30. It employs more than 1,450 people in 34 offices across six continents.

    EPIC was advised throughout the transaction by Bank of America/Merrill Lynch on finance and Kramer Levin Naftalis & Frankel on law. Carlyle was advised by Sandler O’Neill & Partners on finance and Wachtell, Lipton, Rosen & Katz on legal matters.

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