REFILE-UPDATE 3-Onex to buy insurance brokerage from Goldman fund for $2.3 bln

Mon Nov 26, 2012 2:27pm EST
 
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* Onex Partners III to make equity investment of about $700 mln

* USI says its employees will remain investors in the company

* Deal expected to close by year end

* Onex shares fall 2 percent

By Bhaswati Mukhopadhyay

Nov 26 (Reuters) - Canadian private equity firm Onex Corp will buy U.S.-based insurance brokerage USI from Goldman Sachs Group Inc's private equity fund for $2.3 billion to expand its financial services footprint.

Insurance brokers have seen strong revenue growth over the past few quarters as insurers have raised prices on their offerings to offset big catastrophe losses last year.

"The U.S. property and casualty insurance industry seems a lot more attractive now because the business could generate good cash flow and that is important for private equity players," analyst Scott Chan of Canaccord Genuity said, adding that the deal is a "positive".   Continued...