In a landmark deal, Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management, and consulting services firm, has signed a definitive agreement to acquire AssuredPartners for $13.45 billion in an all-cash transaction. This acquisition represents the largest sale of a U.S. insurance broker to a strategic acquiror in industry history and marks a significant step in Gallagher’s ongoing expansion.
AssuredPartners: A Transformational Growth Story
Founded in 2011 as a GTCR Leaders Strategy™ partnership with industry veteran Jim Henderson, AssuredPartners has grown to become the 11th largest insurance broker in the United States. With a workforce of 10,900 professionals and approximately 400 offices across North America, the U.K., and Ireland, the company offers a wide array of risk management solutions, including property and casualty insurance and employee benefits.
Over the past 13 years, AssuredPartners has successfully integrated over 500 businesses and reported revenues of $2.9 billion and EBITDAC of $938 million for the trailing 12 months ended September 30, 2024. GTCR reacquired a majority stake in AssuredPartners in 2019, in partnership with Apax Fund IX, further accelerating the company’s growth trajectory.
Strategic Alignment with Gallagher
J. Patrick Gallagher Jr., chairman and CEO of Arthur J. Gallagher & Co., praised AssuredPartners’ entrepreneurial spirit and middle-market focus. “We have held in high regard the fast-growing AssuredPartners franchise since its founding in 2011. AssuredPartners’ broad U.S. footprint and niche practice capabilities make them an ideal merger partner for Gallagher,” he said.
The acquisition is expected to deepen Gallagher’s expertise in sectors such as transportation, energy, healthcare, and government contracting while expanding its footprint in the U.K. and Ireland. The deal also aligns with Gallagher’s strategy to bolster its middle-market property and casualty and employee benefits offerings.
Financial Details and Future Integration
The transaction’s net consideration, after accounting for a $1 billion deferred tax asset, is approximately $12.45 billion, representing an EBITDAC multiple of 11.3x after synergies. Gallagher plans to finance the acquisition through a combination of long-term debt, short-term borrowings, free cash, and common equity.
The firm anticipates $160 million in synergies and $500 million in integration costs over the next three years, including $200 million in non-cash retention awards. Regulatory approvals and customary closing conditions are expected to be finalized by the first quarter of 2025.
Industry Reactions and Future Outlook
AssuredPartners’ leadership highlighted the cultural alignment and shared client-first values between the two firms. “This marks a significant milestone in AssuredPartners’ journey, showcasing the outstanding business we’ve built and the strong growth we’ve experienced,” said Randy Larsen, CEO of AssuredPartners. Executive Chairman Jim Henderson echoed this sentiment, emphasizing the mutual commitment to innovation and client service.
GTCR’s Aaron Cohen, Managing Director, lauded the successful partnership and the strategic vision that drove AssuredPartners’ growth. Apax’s Ashish Karandikar reflected on the firm’s nine-year collaboration, noting the company’s execution of a well-defined growth strategy.
Gallagher’s acquisition of AssuredPartners not only reshapes the competitive landscape but also underscores the increasing value of middle-market insurance brokers. With its expanded capabilities and global reach, Gallagher is poised to deliver enhanced services and solutions to its clients while setting new benchmarks in the insurance brokerage industry.
The deal’s completion will undoubtedly mark a pivotal moment in the evolution of both companies, solidifying their positions as industry leaders and paving the way for future innovations in insurance and risk management.