Michael Dell's family office is close to acquiring insurance broker The Baldwin - FT

Shares of insurance broker The Baldwin Insurance Group rose 7.8% during trading on September 14—amid a broader market decline. A consortium of investors led by DFO Management—the family investment office of Dell Technologies founder and CEO Michael Dell—plans to acquire the company for nearly $8 billion.

An investment consortium led by DFO Management—one of the world’s largest family investment offices, which manages Michael Dell’s capital—is close to finalizing a deal to acquire an insurance broker, the FT reported, citing sources. Following the deal, The Baldwin Insurance will become a privately held company, the FT notes. No official announcement regarding the deal has been made yet.

According to FT sources, the insurer will be valued at $32.5 per share, and the deal could be worth approximately $7.7 billion. The deal value represents a premium of nearly 90% over the company’s valuation as of June, when reports first emerged that Baldwin was considering selling the business, the FT reports.

The acquisition of Baldwin will be a rare example of a full-scale leveraged buyout led by DFO, the FT notes. Sequence Holdings—a technology group established earlier this year that specializes in implementing technology solutions for service-sector companies—is participating in the buyout alongside DFO Management. To improve business efficiency, Sequence’s team of engineers works directly with company management.

According to the FT, in the bid for Baldwin, Della's consortium outbid several major private investment firms.

Baldwin specializes in commercial insurance brokerage. The company helps medium and large businesses select insurance coverage for a variety of risks—from cybersecurity and employee insurance to property insurance. The company’s revenue in the second quarter rose 30% to $492.9 million, but organic revenue growth was 2% year-over-year. Adjusted EBITDA rose 37% to $116.7 million. At the same time, the company reported a GAAP loss of $39 million, or 42 cents per share.

During the quarter, the company allocated an additional $80 million to repurchase approximately 4 million of its own shares, with the net debt-to-EBITDA ratio at the end of the period standing at approximately 4.5.

Baldwin's stock has risen nearly 23.4% since the beginning of the year. Of the 11 Wall Street analysts covering the company, seven recommend buying its stock, and four recommend holding it. The average price target is $32.22, which is 8.7% higher than the closing price on September 11.