Gallagher to buy AssuredPartners in $13.5 billion deal

(Reuters) – Arthur J Gallagher & Co. said on Monday it has agreed to acquire insurance broker AssuredPartners Inc. in a $13.45 billion deal, as it looks to bolster its presence in the vast and fast-growing middle-market segment.

Gallagher follows in the footsteps of rival insurance brokers Aon PLC and Marsh & McLennan Cos. Inc., which have struck deals worth $13 billion and $7.75 billion, respectively, over the last 12 months to expand their foothold in the middle-market insurance business.

Gallagher said the net consideration for the deal was about $12.45 billion after giving effect to an estimated $1 billion deferred tax asset.

The middle-market insurance business provides services designed for mid-sized firms that make between $10 million and $1 billion in annual revenue.

Private equity firm GTCR, in partnership with Jim Henderson, had founded AssuredPartners in 2011. Since then, the Orlando, Florida-based company has become one of the largest insurance brokers in the United States.

GTCR sold the company to Apax Partners in 2015. But again in 2019, an investor group led by GTCR agreed to acquire it from Apax, which held a minority stake in the company.

AssuredPartners distributes insurance across property and casualty, commercial, employee benefits and personal lines. It generated $2.9 billion in adjusted revenue for the 12 months ended Sept. 30.

Gallagher expects to finance the transaction — likely to close during the first quarter of 2025 — through a mix of cash, debt and equity. The deal is expected to boost its adjusted profit by double digits.

Separately, Gallagher unveiled an $8.5 billion stock offering to fund the acquisition. It has also secured a $13.45 billion short-term loan.

Last year, Gallagher acquired Cadence Bank’s insurance brokerage unit for $904 million.