HUB International, a Chicago, Illinois-headquartered insurance brokerage and financial services firm backed by Hellman & Friedman and Altas Partners, is being prepared for an initial public offering as soon as next year, according to three sources familiar with the company.

The company’s backers have been exploring strategic options, and an IPO is seen as the favorite route at this stage, said the sources.

While no formal process or selection of a syndicate has kicked off yet, the owners and management have been having preliminary discussions on a listing, said two of the sources.

One of the sources said the business has proved to be fundamentally strong over the past few years, as the sector itself has been attracting sponsor interest due to its scalability via inorganic growth.

M&A has been a major component of HUB’s value creation plan, and the company has acted as a consolidator in its sector. Executive vice president Larry Lineker told this news service in an interview last year that the company was hoping to exceed last year’s total of 65 acquisitions in 2024, citing a strong pipeline.

With an enterprise valuation of USD 23bn, HUB’s valuation has grown fivefold over the last 10 years, he said, with one of the sources stating that by the time of IPO, the business could top a valuation of around USD 30bn.

Enthusiasm around IPO candidates in this sector is also rising, this news service reported. This year, Texas-based insurance broker TWFG [NASDAQ:TWFG], which is backed by reinsurer RenaissanceRe [NYSE:RNR], priced an IPO above the indicated range, seeking to raise up to USD 187m, as reported.

The IPO would mostly represent a liquidity option for the company’s backers, the three sources agreed. Hellman & Friedman, which acquired the business in 2013, sold a minority stake in the business in 2018 to Toronto, Ontario-based investment firm Altas Partners. Last year, it raised a substantial investment from Leonard Green & Partners alongside other institutional minority investors through a private placement.

Even if the deal ends up entailing a primary component, the listing will be mostly about the existing PE owners cashing in on their investments, said one of the sources.

HUB provides risk management, insurance, employee benefits, retirement and wealth management products and services, according to a release. It has more than 18,000 employees in offices located throughout North America.

In a statement, president and chief executive officer Marc Cohen said: “HUB is enjoying tremendous growth brought on by a culture of shared resources regardless of geography and ongoing bullish M&A activity.  As the largest middle market broker, we’re focused on continuing to scale our business in key runway areas like industry specialization, retirement and private wealth, private client, and complex risk to serve the upper middle market.”

“That focus continues to drive some of the best financial metrics and our position as one of the best private equity-owned brokerages in our industry. Additionally, we continue to explore avenues to achieve more liquidity for existing and new investors in the coming years ahead,” Cohen said.

Hellman & Friedman declined to comment. Altas Partners and Leonard Green & Partners did not respond to requests for comment.