Arthur J. Gallagher & Co. has recently announced its definitive agreement to acquire AssuredPartners, marking a significant milestone in the latter's journey. AssuredPartners, founded in 2011, is a leading U.S. insurance broker with pro forma revenues of approximately $2.9 billion and pro forma EBITDAC of $938 million for the trailing 12 months ending September 30, 2024. The acquisition agreement involves a gross consideration of $13.45 billion, representing a pro forma EBITDAC multiple of 14.3x. After adjustments, the net consideration EBITDAC multiple is 11.3x, with net consideration estimated at approximately $12.45 billion.
The transaction is expected to be financed through a combination of long-term debt, short-term borrowings, free cash, and common equity. Gallagher anticipates recognizing synergies of about $160 million and integration costs of approximately $500 million, including $200 million of non-cash retention awards, over the next three years. Factoring in these assumptions, the acquired operations are projected to be 10 to 12% accretive to Gallagher’s trailing twelve-month adjusted GAAP EPS as of September 30, 2024.
AssuredPartners, with approximately 10,900 colleagues serving clients through around 400 offices in the U.S., the U.K., and Ireland, is expected to bring several benefits to Gallagher. These include expanding Gallagher’s retail middle-market property/casualty and employee benefits focus, building on new business opportunities through leveraging Gallagher’s expertise and data analytics, and deepening Gallagher’s capabilities across multiple niche practice groups.
The acquisition is subject to customary regulatory approvals and is expected to close during the first quarter of 2025. For further details on the transaction and financial estimates, interested parties can refer to Gallagher’s website or tune in to the upcoming conference call hosted by J. Patrick Gallagher, Jr., on Monday, December 9, 2024.
Arthur J. Gallagher & Co., a global insurance brokerage, risk management, and consulting services firm, is headquartered in Rolling Meadows, Illinois, and operates in approximately 130 countries worldwide. The market has reacted to these announcements by moving the company's shares -0.6% to a price of $295.07. For the full picture, make sure to review Arthur J. Gallagher &'s 8-K report.
