Gallagher to Increase M&A Activity Post AssuredPartners Acquisition – Business Insurance
Arthur J. Gallagher & Co. recently made headlines with a significant $13.45 billion acquisition deal to purchase AssuredPartners Inc. This move is expected to not only boost Gallagher’s annual revenue by $2.9 billion but also increase its workforce by a significant 10,900 employees. According to Gallagher’s top executive, this acquisition will not only solidify their position as the world’s third-largest insurance brokerage but also open doors for future acquisitions.
With this deal, Gallagher’s annual revenue is projected to soar to $14 billion, a testament to the scale and impact of this acquisition. The purchase price includes a net consideration of $12.45 billion and an additional $1 billion in deferred tax assets. AssuredPartners, known as the 11th largest brokerage of U.S. business, reported $2.49 billion in revenue in 2023. As of Sept. 30, they had $2.9 billion in annualized revenue and $938 million in earnings before interest, taxes, depreciation, amortization, and coronavirus.
In order to fund this significant deal, Gallagher also announced an $8.5 billion stock offering. The acquisition is set to be finalized in the first quarter of 2025. The price of the acquisition, calculated at a 14.3 times EBITDAC multiple, falls within the range of similar large deals in the industry.
Despite the large scale of the acquisition, Gallagher aims to realize about $160 million in revenue synergies and savings in various operational areas. Notably, the brokerage emphasizes that these savings will not come from significant layoffs. In fact, all current AssuredPartners employees are expected to transition to Gallagher.
AssuredPartners, founded in 2011, has established itself as a prominent player in the industry with a wide reach across the U.S., U.K., and Ireland, employing about 400 offices. The company has seen considerable growth and success over the years, making it an attractive acquisition target for Gallagher.
Looking ahead, the acquisition of AssuredPartners is anticipated to pave the way for Gallagher to accelerate its acquisition program further. With a dedicated team focused on mergers and acquisitions, Gallagher aims to ramp up its deal-making activities significantly in the coming years.
Overall, this acquisition marks a significant milestone for both Arthur J. Gallagher & Co. and AssuredPartners Inc., setting the stage for a new chapter of growth and expansion in the insurance brokerage industry.
