Arthur J. Gallagher to acquire AssuredPartners, sees accretion

Arthur J. Gallagher (AJG) announced it has signed a definitive agreement to acquire AssuredPartners. The transaction is subject to customary regulatory approvals and is expected to close during the first quarter of 2025. Founded in 2011 by GTCR, a leading private equity firm, in partnership with Jim Henderson, AssuredPartners is a U.S. insurance broker with client capabilities across commercial property/casualty, specialty, employee benefits and personal lines. AssuredPartners’ 10,900 colleagues serve a wide range of customers including commercial, public entity and individuals, through approximately 400 offices located across the U.S., the U.K. and Ireland. Pro forma revenues and EBITDAC for the trailing 12 months ended September 30 were approximately $2.9B and $938M, respectively. Under the agreement, Gallagher will acquire the stock of AssuredPartners’ parent company from GTCR and funds advised by Apax Partners for gross consideration of $13.45B, representing a pro forma EBITDAC multiple of 14.3x. After giving effect to an estimated $1B deferred tax asset, net consideration is approximately $12.45B. The net consideration EBITDAC multiple is 11.3x after giving effect to the deferred tax asset and estimated synergies. Gallagher expects to finance the transaction using a combination of long-term debt, short-term borrowings, free cash and common equity. The final funding does not inhibit Gallagher from continuing its ongoing tuck-in M&A strategy and contemplates Gallagher maintaining its current solid investment grade debt rating. Gallagher also expects to recognize synergies of approximately $160M and integration costs of approximately $500M, including $200M of non-cash retention awards, over the next three years. After giving effect to these assumptions, the pro forma results discussed above and the impact of expected synergies, the acquired operations would have been approximately 10% to 12% accretive to Gallagher’s trailing twelve month adjusted GAAP EPS as of September 30.