Gallagher follows in the footsteps of rivals Aon and Marsh McLennan, which have also struck $13 billion and $7.75 billion, deals, respectively, over the last 12 months to expand into the vast and fast-growing middle-market insurance business
Arthur J Gallagher said on Monday it would acquire insurance broker AssuredPartners in an all-cash deal worth $13.45 billion, as it looks to bolster its focus on property and casualty and employee benefits across the U.S.
Gallagher follows in the footsteps of rivals Aon and Marsh McLennan, which have also struck $13 billion and $7.75 billion, deals, respectively, over the last 12 months to expand into the vast and fast-growing middle-market insurance business.
Middle-market insurance caters to mid-sized businesses that generate annual revenue between $10 million and $1 billion.
The Insurer, a Reuters publication, exclusively reported on Sunday that Gallagher was close to sealing the deal for AssuredPartners.
Gallagher said the deal’s net consideration was about $12.45 billion after giving effect to an estimated $1 billion deferred tax asset.
The broad U.S. footprint and middle-market focus of AssuredPartners make it an ideal merger partner, said J Patrick Gallagher, Jr, chairman and CEO of Arthur J Gallagher.
Private equity firm GTCR — which founded AssuredPartners in partnership with insurance industry veteran Jim Henderson — said the deal was the largest sale of a U.S. insurance broker to a strategic acquirer in the industry’s history.
Shares of Rolling Meadows, Illinois-based Gallagher fell 1.4% in premarket trading.
AssuredPartners distributes insurance across property and casualty, commercial, employee benefits and personal lines. It generated $2.9 billion in adjusted revenue for the 12 months ended Sept. 30.
GTCR initially owned AssuredPartners from its inception in 2011 till 2015, when it sold the Orlando, Florida-based company to private equity firm Apax Partners.
Again in 2019, an investor group led by GTCR agreed to acquire it from Apax, which held a minority stake in the company.
Gallagher expects to finance the transaction — likely to close during the first quarter of 2025 — through a mix of cash, debt and equity. The deal is expected to boost its adjusted profit by double digit and build on its business in the UK and Ireland.