Arthur J. Gallagher & Co. has agreed to acquire Cadence Bank subsidiary Cadence Insurance in a $904 million cash deal. As part of the deal, Gallagher will become the preferred insurance broking partner of Cadence Bank.
Cadence Insurance offers commercial property/casualty, employee benefits and personal lines services, with nearly 800 employees in more than 3o offices across Southeastern states.
It is the second bank insurance subsidiary deal announced since late September. Arthur J. Gallagher earlier said it agreed to acquire Eastern Bank subsidiary Eastern Insurance Group LLC in a net $510 million deal.
The agency is growing quickly, offering “strong niche capabilities across construction, real estate, manufacturing, healthcare and professional services,” said Arthur J. Gallagher Chairman, President and Chief Executive Officer J. Patrick Gallagher said in a statement.
“There are immense long-term growth opportunities,” he added.
Markham McKnight and Chris Boone will continue to lead Cadence Insurance under the direction of Bumpy Triche, head of Gallagher’s Mid-South retail property/casualty brokerage operations, and Robby White, head of Gallagher’s South-Central region employee benefits consulting and brokerage operations, Arthur J. Gallagher said.
Other management and employees are expected to transition to Gallagher, Cadence said in a separate statement. The transaction is expected to close in the fourth quarter, subject to closing conditions.
Under the agreement, Arthur J. Gallagher said it will acquire the stock of Cadence Insurance for $749 million. The deal also comes with a an associated $155 million discounted tax benefit. The global broker said integration costs and expected non-cash management retention costs should total $70 million over the next three years.
Cadence Bank said its affiliate is believed to be the second-largest bank-affiliated insurance brokerage in the United States. It said it will use proceeds for strategic efforts and growing its banking franchise.
Arthur J. Gallagher & Co. is ranked No. 4 on Best’s Review’s list of top insurance brokers with 2022 total revenue of $8.40 billion.
Shares of Arthur J. Gallagher & Co. (NYSE: AJG) traded on the afternoon of Oct. 24 at $231.21, up 1.53% from the previous close.