Arthur J. Gallagher agreed to acquire insurance brokerage AssuredPartners in an all-cash deal valued at about $13.45 billion as part of its strategy to enhance its retail middle-market property and casualty focus throughout the United States. Gallagher will buy the stock of AssuredPartners' parent company from private equity firm GTCR and funds managed by Apax Partners, as stated in a recent announcement.
The net consideration for the deal is $12.45 billion, after accounting for a deferred tax asset estimated at roughly $1 billion, as reported by the insurance broker. This transaction, which must receive approval from regulatory agencies, is anticipated to finalize in the first quarter of 2025. Gallagher's stock reflected a 1.3% decrease in premarket activity following the announcement. "AssuredPartners' entrepreneurial spirit, extensive US presence, and focus on the middle market position them as the perfect merger partner for Gallagher," stated J.
Patrick Gallagher Jr. "Together, we can deliver even greater value to our clients and further solidify Gallagher's platform for future growth." The broker expects the acquired operations to boost its trailing 12-month per-share adjusted earnings by approximately 10% to 12% as of September 30. Gallagher also forecasts around $160 million in synergies and $500 million in integration costs over the forthcoming three years. Founded in 2011, AssuredPartners is headquartered in Florida and employs around 10,900 individuals, providing services across commercial property and casualty, specialty lines, risk management, employee benefits, and personal lines.
The company was established through a partnership between GTCR and Jim Henderson, the current Executive Chairman. After being sold to Apax Fund VIII in 2015, GTCR reacquired a majority interest via a partnership with Apax Fund IX in 2019. "The announcement today is the result of a tremendous effort by the entire AssuredPartners team, and we are enthusiastic about the prospects for the business," said Henderson in a separate statement. Gallagher intends to finance the acquisition through a mix of long-term debt, short-term borrowings, available cash, and common equity.
In addition, Gallagher disclosed it has initiated a public offering of $8.5 billion worth of its shares. The proceeds from this offering will be allocated to cover a portion of the cash consideration for the AssuredPartners acquisition and for general operational expenses..