Gallagher Inks $13.5B Deal for Major Insurance Broker
Arthur J. Gallagher has acquired insurance broker AssuredPartners for $13.45 billion in cash to enhance its presence in the U.S. middle-market property/casualty and employee benefits space.
Under the agreement, Rolling Meadows, IL-based Gallagher will acquire AssuredPartners’ parent company from private equity firm GTCR and funds advised by Apax Partners LLP. The net consideration for the transaction, after accounting for a $1 billion deferred tax asset, is approximately $12.45 billion, representing an EBITDAC multiple of 11.3x after synergies.
Gallagher intends to finance the purchase with a combination of long-term debt, short-term borrowings, free cash, and common equity, while maintaining an investment-grade debt rating.
The acquisition, one of the largest in the insurance brokerage industry, is slated to close in the first quarter of 2025. The purchase concludes a 13-year ownership period that began with GTCR’s leaders strategy alliances and brought Jim Henderson, an insurance industry veteran, to the helm. Henderson is credited with growing the Orlando, FL.-based AssuredPartners to be one of the largest insurance brokerages in the U.S.
Henderson and CEO Randy Larsen led the business through ownership changes. GTCR originally sold the company to Apax Partners’ Apax Fund VIII in 2015. The $40 billion GTCR then bought back a majority stake in partnership with Apax Fund IX in a recapitalization in 2019. Apax Partners also agreed to sell its minority stake in AssuredPartners.
“We have held in high regard the fast-growing AssuredPartners franchise since its founding in 2011,” said J. Patrick Gallagher, Jr., chairman and CEO of Arthur J. Gallagher. “AssuredPartners’ entrepreneurial spirit, broad U.S. footprint and middle-market focus make them an ideal merger partner for Gallagher.”
Gallagher’s announcement follows recent deals by Marsh McLennan and Aon to enter the middle market. Aon acquired NFP, a middle-market P/C broker, for $13 billion in April. Last month, Marsh McLennan paid $7.75 billion for McGriff Insurance Services.