KKR & Co. (KKR), the private-equity firm led by Henry Kravis and George Roberts, agreed to buy Mitchell International Inc., the first buyout by the firm’s technology group since the head of the team stepped down earlier this year.
The transaction is valued at about $1.1 billion, including debt, according to a person with knowledge of the matter, who requested anonymity because financial terms weren’t disclosed. KKR is buying Mitchell from Aurora Capital Group, a Los Angeles-based private-equity firm, the companies said in a statement today.
Kristi Huller, a spokeswoman for New York-based KKR, declined to comment on the deal’s value.
The buyout is being done by KKR’s technology group, run by Herald Chen and David Kerko, and is the team’s first acquisition since Adam Clammer stepped down in May as head of the group. Mitchell, based in San Diego, provides claims-processing technology to insurance companies and collision-repair facilities, benefiting from steady cash flows in the insurance and health-care industries.
“We think our capabilities in technology as well as health care and insurance on a global basis will help the company grow,” Chen said in a telephone interview. “The previous owners invested to improve its core platforms, and we’ll look to build on that with a particular focus on products.”
Aurora, founded in 1991 by Gerald Parsky, bought Mitchell for about $500 million in 2007, with General Electric Pension Trust co-investing in the purchase. The company previously was owned by private-equity firm Hellman & Friedman LLC.
Mitchell has annual revenue of $300 million to $400 million, said Chen, and KKR is seeking to more than double it. KKR, which approached Aurora in the past about buying the company and was rebuffed, plans to help Mitchell grow in part through acquisitions and is targeting international expansion, particularly in Western Europe and Asia, Chen said.
The companies expect the buyout to close by the end of the year.
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