Arthur J. Gallagher & Co. announced a definitive agreement to acquire AssuredPartners, a leading insurance brokerage firm, for $13.45 billion in an all-cash transaction. This strategic acquisition significantly expands Gallagher’s presence in the property and casualty and employee benefits markets across the United States, strengthening its position as a global insurance brokerage leader.
Arthur J. Gallagher & Co. Logo. Source: Wikimedia Commons
The acquisition of AssuredPartners brings a wealth of expertise and capabilities to Gallagher, particularly in niche segments such as transportation, energy, healthcare, government contractors, and public entities. Furthermore, the deal bolsters Gallagher’s existing operations in the UK and Ireland. The transaction was initially reported by The Insurer, a Reuters publication.
The net consideration for the deal, after accounting for a deferred tax asset of approximately $1 billion, is around $12.45 billion. Private equity firm GTCR, which co-founded AssuredPartners in 2011 with industry veteran Jim Henderson, highlighted the transaction as the largest-ever sale of a U.S. insurance broker to a strategic buyer.
AssuredPartners offers a comprehensive range of insurance solutions, including property and casualty, commercial, employee benefits, and personal lines. In the 12 months leading up to September 30th, the company generated $2.9 billion in adjusted revenue. GTCR’s initial ownership of AssuredPartners lasted until 2015, when it was sold to Apax Partners. Subsequently, in 2019, GTCR led an investor group to reacquire the company, with Apax retaining a minority stake.
Insurance brokers collaborating in an office setting. Source: Unsplash
According to Gallagher CFO Douglas Howell, the two companies had explored potential collaboration in the past. AssuredPartners had even considered an initial public offering before the acquisition discussions resurfaced in recent weeks, culminating in the current agreement without the involvement of investment bankers.
This acquisition significantly strengthens Gallagher’s presence in the commercial middle market, a sector where it has operated for almost a century. The move aligns with recent industry trends, as competitors Aon and Marsh McLennan have also made substantial acquisitions to expand their middle-market footprint.
Gallagher CEO Patrick Gallagher emphasized the strategic fit of AssuredPartners, citing its broad U.S. presence and middle-market focus. He further highlighted the intention to leverage data and analytics to empower AssuredPartners within their local communities, anticipating significant growth opportunities. The middle market typically encompasses businesses with annual revenues between $10 million and $1 billion.
A business meeting taking place, symbolizing strategic discussions and partnerships. Source: Unsplash
To finance the acquisition, Gallagher plans to utilize a combination of cash, debt, and equity. The company has announced an $8.5 billion stock offering and secured a $13.45 billion short-term loan. The transaction is projected to close in the first quarter of 2025 and is expected to contribute to double-digit growth in Gallagher’s adjusted profit.
