Assured Partners Acquisition: Key Details, Impact, and What Comes Next

Arthur J. Gallagher & Co. has signed a definitive agreement to acquire AssuredPartners for $13.45 billion. This acquisition is poised to significantly enhance Gallagher's market presence, particularly in the U.S. middle-market property/casualty and employee benefits sectors. The deal underscores Gallagher's strategic focus on expanding its capabilities and leveraging AssuredPartners' extensive expertise and resources.

What Is Assured Partners?

Founded in 2011, AssuredPartners specializes in insurance brokerage and employee benefit solutions. The company offers a comprehensive range of services, including business insurance, risk management, employee benefits, and personal insurance. AssuredPartners differentiates itself through its specialization in various products and industries, innovative insurance solutions, and partnerships with regional and local firms. This approach allows them to provide best-in-class asset protection and unparalleled service to their clients.

Who Acquired Assured Partners?

Gallagher is a global leader in insurance, risk management, and consulting services. The company offers tailored insurance solutions, effective risk management strategies, and strategic consulting services. Key products include casualty, cyber liability, and environmental insurance, as well as employee benefits consulting. With over 11.3 billion USD in revenues and a presence in more than 130 countries, Gallagher's extensive network of over 970 offices underscores its significant market influence and commitment to client service.

When Was Assured Partners Acquired?

Gallagher signed the agreement to acquire AssuredPartners on December 9, 2024. This acquisition comes at a time when the insurance industry is experiencing significant consolidation, driven by the need for scale and specialized capabilities. The timing aligns with Gallagher's strategy to enhance its middle-market focus and expand its footprint in the U.S. The deal is expected to close in the first quarter of 2025, subject to regulatory approvals.

Why Was Assured Partners Acquired?

• Market Expansion: The acquisition of AssuredPartners significantly enhances Gallagher's footprint, particularly in the middle-market property and casualty and employee benefits sectors across the U.S. AssuredPartners operates approximately 400 offices in the U.S., U.K., and Ireland, which will now be part of Gallagher's network. This expansion deepens Gallagher's capabilities across multiple niche practice groups, including Transportation, Energy, Healthcare, Government Contractors, and Public Entity.
• Technology Integration: Gallagher plans to leverage AssuredPartners' industry expertise, data analytics, and specialty products to enhance service offerings and operational efficiency. The integration will involve migrating agency management systems, general ledgers, HR systems, and consolidating other systems, with an expected investment of approximately $500 million over three years. This strategic move aims to build on new business opportunities and provide more value to clients through common systems and standardized service models.
• Competitive Advantage: The acquisition strengthens Gallagher's competitive position by adding scale and expertise in various sectors such as transportation, energy, healthcare, and government contractors. The combined resources and expertise of both companies are expected to enhance their ability to deliver for clients, providing a significant competitive advantage in the insurance brokerage industry. Additionally, the deal is financially attractive, with estimated double-digit adjusted EPS accretion, including the impact of synergies.

Acquisition Terms

• Acquisition Price: The gross consideration for the acquisition is $13.45 billion, with a net consideration of approximately $12.45 billion after accounting for an estimated $1.0 billion deferred tax asset.
• Payment Method: The transaction will be financed using a combination of long-term debt, short-term borrowings, free cash, and common equity.
• Key Conditions or Agreements:
  • The transaction is subject to customary regulatory approvals and is expected to close during the first quarter of 2025.
  • Gallagher expects to recognize synergies of approximately $160 million and integration costs of approximately $500 million, including $200 million of non-cash retention awards, over the next three years.
  • The acquisition is expected to be financially attractive, with estimated double-digit adjusted EPS accretion including the impact of synergies.
  • The final funding does not inhibit Gallagher from continuing its ongoing tuck-in M&A strategy and contemplates maintaining its current solid investment grade debt rating.
  • The transaction includes acquiring the stock of AssuredPartners' parent company from GTCR and funds advised by Apax Partners LLP.

Impact on Assured Partners

The acquisition of AssuredPartners by Gallagher is set to bring significant changes to operations and management. Approximately 10,900 AssuredPartners employees will join the Gallagher family, potentially altering management structures to integrate the new team. The AssuredPartners brand will be discontinued, and the integration will involve migrating various systems, including agency management and HR systems, with an estimated investment of $500 million over three years. This strategic move aims to leverage the combined expertise and resources of both companies, enhancing operational efficiency and service delivery.

In terms of product offerings and services, the acquisition will expand Gallagher's capabilities in niche practice groups such as Transportation, Energy, Healthcare, and Government Contractors. The merger will also deepen Gallagher's focus on middle-market property/casualty and employee benefits across the U.S. Employees have expressed optimism about the merger, highlighting the cultural alignment and shared values between the two firms. While direct customer reactions are not detailed, the combined resources and expertise are expected to enhance client service and offerings, providing more value to customers.

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