Gallagher strikes $13.5 billion deal for AssuredPartners to strengthen insurance coverage dealer enterprise

By Pritam Biswas and Arasu Kannagi Basil

(Reuters) -Arthur J Gallagher will purchase insurance coverage dealer AssuredPartners in a $13.45 billion all-cash deal, it stated on Monday, because it deepens give attention to property and casualty and worker advantages throughout the U.S.

The deal will increase Gallagher’s choices in area of interest segments, together with transportation, power, healthcare, authorities contractors and public entity, and bolster its enterprise within the UK and Eire.

The Insurer, a Reuters publication, completely reported on Sunday that Gallagher was near a deal for AssuredPartners.

Gallagher stated the deal’s web consideration was about $12.45 billion, reflecting about $1 billion deferred tax asset. Shares of the Illinois-based firm dipped 0.3%.

Personal fairness agency GTCR — which based AssuredPartners in partnership with trade veteran Jim Henderson — stated the deal was the biggest sale of a U.S. insurance coverage dealer to a strategic acquirer within the trade’s historical past.

AssuredPartners distributes insurance coverage throughout property and casualty, business, worker advantages and private traces. It generated $2.9 billion in adjusted income for the 12 months ended Sept. 30.

GTCR initially owned AssuredPartners from its inception in 2011 until 2015, when it bought the Florida-based firm to personal fairness agency Apax (HN:IBC) Companions.

In 2019, an investor group led by GTCR agreed to amass it from Apax, which retained a minority stake within the firm.

Gallagher had the chance to check notes with AssuredPartners final yr, its Chief Monetary Officer Douglas Howell instructed analysts.

At one level, AssuredPartners determined it needed to do an preliminary public providing, Howell stated, including that the deal got here again on over the past six weeks with no funding bankers concerned.

MIDDLE-MARKET EXPANSION

The deal will deepen Gallagher’s footing within the business middle-market house, the place it has operated for almost a century.

Gallagher follows within the footsteps of rivals Aon (NYSE:AON) and Marsh McLennan (NYSE:MMC), which have struck $13 billion and $7.75 billion, offers, respectively, over the past yr to increase into the huge and fast-growing middle-market insurance coverage enterprise.

The broad U.S. footprint and middle-market focus of AssuredPartners make it a super merger companion, Gallagher CEO Patrick Gallagher stated in a press release.

Center-market insurance coverage caters to mid-sized companies that generate annual income between $10 million and $1 billion.

“We’ll hand them instruments, specifically within the information and analytic world, and they’ll make them extremely stronger of their native communities, which is the place we see large development,” Pat Gallagher stated in an interview with Reuters.

Gallagher expects to finance the transaction via a mixture of money, debt and fairness. Individually, it unveiled an $8.5 billion inventory providing to fund the acquisition and secured a $13.45 billion short-term mortgage.

The deal, which is predicted to spice up Gallagher’s adjusted revenue by double digit, is anticipated to shut within the first quarter of 2025.