Arthur J. Gallagher & Co. (AJG) will acquire AssuredPartners Inc. for $13.45 bn. The deal strengthens AJG’s presence in the U.S. middle market and leverages AssuredPartners’ active mergers and acquisitions strategy, according to CEO J. Patrick Gallagher Jr.
AssuredPartners, a U.S. retail and specialty broker, was one of AJG’s top merger targets. The acquisition enhances AJG’s position in the commercial middle market and expands its specialty market capabilities.
We have held in high regard the fast-growing AssuredPartners franchise since its founding in 2011. AssuredPartners’ entrepreneurial spirit, broad U.S. footprint and middle-market focus make them an ideal merger partner for Gallagher.
J. Patrick Gallagher, Jr., Chairman and CEO
By further leveraging our deep industry verticals, investments in data and analytics, access to specialty products, our common systems and standardized service model, together we can provide even more value to clients and further position Gallagher for future growth,” said J. Patrick Gallagher, Jr.
AssuredPartners brings expertise in risk pool administration, programs, managing general agent (MGA), managing general underwriter (MGU), and wholesale operations.
The deal also supports AJG’s wholesale, reinsurance, and claims management businesses, while increasing its scale and talent pool in the U.K. and Ireland. AssuredPartners operates 400 offices in 40 U.S. states, the U.K., and Ireland. Its business model is geographically diverse with minimal overlap with AJG’s existing operations.
AssuredPartners places $11 bn in premiums and generates revenue from three main sources: 60% from retail property/casualty, 25% from retail benefits, and 17% from wholesale specialty operations. The acquisition will bring AJG’s combined revenue to approximately $14 bn.
The deal includes $2.9 bn in pro forma trailing 12-month revenue and $160 mn in estimated synergies, according to Gallagher.
Chief Financial Officer Douglas K. Howell said the acquisition will not disrupt AJG’s ongoing tuck-in M&A strategy.
AJG will acquire AssuredPartners’ parent company stock from GTCR and funds advised by Apax Partners LLP for $13.45 bn. After considering a $1 bn deferred tax asset, the net consideration is $12.45 bn. To finance the deal, AJG plans to use a mix of long-term debt, short-term borrowings, free cash, and common equity.
AssuredPartners CEO Randy Larsen called the deal a major milestone, noting it reflects the company’s decade of growth and success. The merger will combine AJG’s global resources with AssuredPartners’ experienced workforce.
This marks a significant milestone in AssuredPartners’ journey, showcasing the outstanding business we’ve built and strong growth we’ve experienced in just over a decade
Randy Larsen, CEO, AssuredPartners
AJG CEO J. Patrick Gallagher noted that the acquisition is not about workforce reductions, stating the combined company will offer employees new career growth opportunities.
Benefits of the acquisition are expected to include:
- Further expanding Gallagher’s retail middle-market property/casualty and employee benefits focus across the U.S.
- Building on new business opportunities by leveraging Gallagher’s expertise, data and analytics and expansive product offerings
- Deepening Gallagher’s capabilities across multiple niche practice groups, including Transportation, Energy, Healthcare, Government Contractors and Public Entity
- Expanding the reach of Gallagher’s tuck-in M&A strategy
- Creating opportunities for Gallagher’s wholesale, reinsurance and claims management businesses
- Adding scale, expertise and talent to Gallagher in the U.K. and Ireland
- Combining two highly compatible entrepreneurial, sales-based cultures, embedded in local communities and focused on growth and client service
- Adding highly seasoned, experienced and proven insurance industry leaders to the Gallagher team
- Financially attractive, with estimated double digit adjusted EPS accretion including the impact of synergies
AssuredPartners, founded in 2011 by GTCR and Jim Henderson, has grown through organic expansion and M&A. The broker employs 10,900 staff and focuses on commercial property/casualty, specialty, employee benefits, and personal lines.
The deal, subject to regulatory approvals, is expected to close in Q1 2025. AJG projects double-digit adjusted earnings per share accretion, factoring in expected synergies.
