La Caisse and KKR Fully Divest From USI Insurance Services
Aon has agreed to buy USI Insurance Services from KKR and other shareholders for US$17.0 billion (C$23.6 billion), pushing the broking and consulting giant deeper into the US middle-market territory it first staked out with its purchase of NFP two years ago.
USI has no meaningful Canadian footprint. Aon does: it has operated here since acquiring Toronto brokerage Reed Stenhouse in 1997, and today runs Aon Reed Stenhouse Inc. out of Toronto, with roughly 1,600 staff across offices in eight provinces and a retirement practice advising on more than C$77bn in Canadian plan assets. USI's business will sit almost entirely outside that structure once the deal closes, since it's a purely American operation.
The more direct Canadian connection is on the seller's side. In March 2017, Caisse de dépôt et placement du Québec - the Quebec pension fund known as CDPQ, or La Caisse - teamed up with KKR to buy USI from Onex Corporation for US$4.3bn (C$6.0bn), each taking an equal stake in the Valhalla, New York-based brokerage.
CDPQ helped fund USI's acquisitions and technology spending as the firm roughly doubled in size over the following six years. In 2023, KKR bought back more than half of CDPQ's position for over US$1bn (C$1.4bn) to become USI's largest shareholder; CDPQ's Martin Longchamps described KKR at the time as "a tremendous strategic partner in this investment journey." Monday's announcement names KKR and unspecified "other shareholders" as sellers without mentioning CDPQ directly, so it isn't clear what stake, if any, the fund still held going into this deal.
Either way, the transaction marks the end of an ownership chapter that started with one of Canada's largest institutional investors.
The numbers
KKR has said the sale delivers roughly six times its return on the 2017 investment and 3.4 times its return on capital across the full life of the position. On a net basis, after accounting for roughly US$278m (C$386m) in tax attributes, Aon's purchase price works out to US$16.7bn (C$23.2bn) - about 14.5 times USI's synergised trailing-12-month adjusted EBITDA.
USI is the tenth-largest insurance broker in the US, generating around US$3bn (C$4.2bn) in annual revenue through more than 10,500 employees across nearly 200 US offices. It sells property and casualty coverage, employee benefits, personal risk products and retirement plan advice, largely to businesses too small for the largest brokers but too complex for a local agency.
Under the deal, USI chairman and chief executive Mike Sicard will become president of Aon plc and global chief executive of its middle-market business, reporting directly to Aon chief executive Greg Case and taking a seat on the firm's executive committee. Case said the deal would make Aon "the premier US middle-market platform," and pointed to what he calls the firm's data and analytics edge over rivals. He was more direct in an interview with the Wall Street Journal: "We see this having a financial impact almost immediately."
Aon expects the combination to generate about US$395m (C$549m) a year in run-rate synergies once fully integrated, and expects it to add to adjusted earnings per share from 2028. The firm plans to fund the entire purchase with new debt and says it intends to hold its current credit ratings - Baa2 at Moody's, A- at S&P - by pausing share buybacks while that debt gets paid down. BofA Securities and Citi advised Aon; KKR worked with Goldman Sachs, Insurance Advisory Partners and Morgan Stanley. The deal is expected to close in the fourth quarter of 2026, subject to regulatory approval.
A second middle-market deal in two years
The move follows the same script as Aon's purchase of NFP, the middle-market broker it bought from Madison Dearborn Partners and HPS Investment Partners for a deal valued at roughly US$13.4bn (C$18.6bn) when it was announced in December 2023. That deal changed Aon's position among the world's largest brokers, and Aon has kept adjusting the pieces since, including selling most of NFP's wealth management arm back to Madison Dearborn last year for roughly US$2.7bn (C$3.8bn).
What Aon kept from NFP says something about what it wants from USI too: the corporate risk, employee benefits and institutional retirement business that sits at the centre of a middle-market client's balance sheet, rather than managing individual investors' wealth. Once the USI deal closes, Sicard will be responsible for combining its operations with NFP and Aon's existing middle-market unit.
What this means for competing brokers
The deal reshuffles a hierarchy that hasn't moved much at the top in years. Aon currently ranks second among US brokers with US$16.99bn (C$23.6bn) in 2025 brokerage revenue, behind Marsh McLennan's US$26.66bn (C$37.1bn), according to brokerage rankings; USI, at US$2.89bn (C$4.0bn) in 2025 revenue and nearly 11,000 staff, ranked tenth. Adding USI's revenue to Aon's puts more distance between it and Arthur J. Gallagher in third - a broker that has been closing ground of its own, having completed its US$13.45bn (C$18.7bn) purchase of AssuredPartners in August 2025.Public brokers using their stock to buy scale, rather than growing it themselves, has been the story of the US sector for two years: Marsh McLennan bought McGriff Insurance Services, Brown & Brown paid US$9.83bn (C$13.7bn) for Accession Risk Management, and now Aon and Gallagher have each done a second mega-deal.
Canada's brokerage market has been consolidating too, though along different lines. Navacord and Acera Insurance completed a merger in February, creating the country's largest privately held brokerage with roughly C$7.2bn in combined insurance and employee-benefits premium. The mechanics are different - no public buyer, no stock currency, just two employee-owned firms deciding to merge - but the underlying pressure to get bigger looks familiar.
Aon reported adjusted second-quarter earnings of US$3.81 (C$5.30) per share on July 29, ahead of analyst estimates, and its stock had a market value of roughly US$75bn (C$104.3bn) as of the Friday before the deal was announced. The announcement also comes weeks after Aon's chief financial officer, Edmund Reese, stepped down; the company said he'll serve as a senior adviser to Case through August 2027.
Before I give you my thoughts, let's go back to 2017 when Financier Worldwide reported that KKR and CDPQ bought USI Insurance Services for US$4.3billion:
Private equity (PE) firm KKR and Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) have announced their intention to jointly acquire USI Insurance Services (USI) from Onex Corporation and its affiliates in a transaction which values the insurance brokerage at $4.3bn.
As partners with equal ownership, KKR and CDPQ – both of which have a strong track record in the financial services and insurance-related sectors and have been longstanding partners in multiple investments over the years – are looking to pursue attractive investment opportunities in high quality businesses with a longer duration and a lower risk profile in order to support strong management teams and facilitate long-term strategic business building.
With more than 4400 professionals operating out of 140 local offices throughout the US, USI delivers property and casualty, employee benefits, personal risk and retirement solutions. USI has become an industry leader by attracting best-in-class industry talent with a long history of deep and continuing investment in local communities.
The investment to acquire USI, which has over $1bn in revenues and operates out of 140 local offices serving every state, will primarily be made through KKR and CDPQ’s core private equity partnership, which includes funds from KKR’s balance sheet and from CDPQ’s pool of capital.
“USI is a fantastic company and is uniquely positioned to help address the risk management, insurance and employee benefits-related needs of small and medium-sized business owners,” said Tagar Olson, head of KKR’s financial services investing practice. “We look forward to working with CDPQ in helping management achieve its long-term vision to grow the business through accelerated investments in USI’s people, technology and solutions.”
A leading global investment firm that manages investments across multiple asset classes including PE, energy, infrastructure, real estate, credit and hedge funds, KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. Moreover, KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business.
Mr Olson continued: “Our successful experience in the insurance and benefits brokerage industry, coupled with the impressive track record of the USI management team, give us confidence in our ability to generate compelling returns while growing the business over the long-term.”
KKR’s co-investor, CDPQ, is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As one of Canada’s leading institutional fund managers (with over $30bn of assets under management), CDPQ invests globally in major financial markets, PE, infrastructure and real estate. Additionally, CDPQ’s private equity team has significant expertise both as a direct investor in companies and as a partner in investment funds.
“CDPQ and KKR are co-leading this investment and leveraging their respective expertise in the sector to support USI’s world-class management as it pursues its strategic plan for long-term growth,” said Christian Puscasiu, co-head of PE direct investing at CDPQ. “Our partnership was established to implement both firms’ patient, disciplined and collaborative investment approach. USI operates in a resilient sector characterized by stable, long-term returns and serves small and medium-sized businesses, which are the cornerstone of the US economy.”
The acquisition of USI by KKR and CDPQ is anticipated to close by the end of the second quarter of 2017 and is subject to customary conditions, including regulatory approvals.
“We are passionately committed to continuing and accelerating USI’s growth and investment as a leader in our industry,” said Michael J. Sicard, chairman and chief executive of USI. “We are excited to work with our new partners at KKR and CDPQ, and want to thank our partners at Onex for the tremendous support they provided to USI.”
Now, my quick thoughts on this deal. The first article above states KKR said the sale of USI Insurance Services to Aon for US$17 billion delivers roughly six times its return on the 2017 investment and 3.4 times its return on capital across the full life of the position.
In 2023, KKR bought back more than half of CDPQ's position for over US$1bn (C$1.4bn) to become USI's largest shareholder. At the time, La Caisse's Head of Private Equity, Martin Longchamps, described KKR as "a tremendous strategic partner in this investment journey."
KKR delivered outstanding results on USI Insurance Services and the man who originated that deal back in 2017 was Tagar Olson (featured at the top of this post):
Tagar Olson serves as a non-executive board member representing Integrum, Stout’s investment partner.
Tagar is a Founder of Integrum and Chairman of the firm’s Investment Committee.
Tagar has over twenty years of investment and acquisition experience, most recently during an 18-year career at KKR, where he was involved in numerous transactions valued at more than $50 billion in the aggregate.
Tagar joined KKR in 2002 and led the firm’s Financial Services industry vertical. At KKR, he participated as a member of the firm’s Investment Committee and Portfolio Management Committee within its Americas Private Equity business. He also served as a member of KKR’s Inclusion & Diversity Committee and its Investments, Markets and Distribution Committee, which was KKR’s most senior governance body.
During his time leading KKR’s Financial Services practice, KKR was one of the most active private equity acquirers of financial services and business services companies. Tagar was involved in KKR investments including Alliant Insurance Services, First Data (now Fiserv), Focus Financial, Mr. Cooper Group, Nephila, PURE, Resolution, Santander Consumer USA, Sedgwick and USI Insurance Services. Tagar also led KKR’s Hospitality & Leisure sector, where he was involved with KKR’s investments in Apple Leisure Group, KSL Recreation, Hotel del Coronado and La Costa Resort & Spa.
Prior to joining KKR, Tagar was with Evercore Partners, where he was involved in a number of private equity transactions and mergers and acquisitions.
Tagar currently sits on the boards of USI Insurance Services, Evertree Insurance, Mr. Cooper Group, Program Productions, and Strategic Risk Solutions. He is co-founder of the DHPS Foundation, a charitable organization dedicated to the research and treatment of rare genetic diseases. He holds a B.S. and B.A.S., summa cum laude, from the University of Pennsylvania.
This is why La Caisse co-invested a large sum with KKR to acquire USI Insurance Services back in 2017, Tagar Olson brought a great investment to the table.
Had La Caisse kept its original position till now, it would have made even more money, but for portfolio reasons, they divested partially out of USI in 2023 and kept a little less than half their original position.
Still, a great investment in the burgeoning US insurance industry and now Aon will expand its operations with this strategic acquisition.
Again, this is why you want to invest alongside the best private equity funds: you gain scale, competence and fantastic long-term performance.
Below, in this video, World trends breaks down the deal, including KKR’s approximately 6X return, Aon’s projected $395 million in synergies, the integration of more than 10,000 employees, potential regulatory scrutiny, and the expected earnings timeline through 2028.
Also, Bloomberg Intelligence reports KKR just scored $3.3 billion windfall on the sale of USI.
Lastly, TechStock reports Aon is nearing a $17 billion acquisition of USI Insurance—valuing USI at 5.7 times its annual revenue. This is nearly 23% of Aon’s total equity value.
Why does it matter now? Analysts project Aon’s EPS to surge in the coming years, with an average price target 14% above current levels. But risks loom: debt funding, integration costs, and regulatory hurdles could impact earnings. Will this bold move accelerate Aon’s growth or mark an expensive gamble? Watch to get the edge before Monday’s market reaction.
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