Insurance broker Arthur J. Gallagher & Co. has acquired insurance broker Bollinger Inc., headquartered in Short Hills, New Jersey, for approximately $276.5 million.
Bollinger’s business includes retail property/casualty insurance placement; wholesale brokerage and program management; and employee benefits brokerage and consultancy. Bollinger has more than 500 employees operating out of eight offices in New Jersey, New York, Pennsylvania and Connecticut.
The deal expands Gallagher’s Northeast footprint and Bollinger’s program business.
“The Bollinger acquisition gives us a unique opportunity to significantly expand our Northeastern operating platform and market presence in three of our core businesses,” said J. Patrick Gallagher Jr., chairman, president and CEO.
Bollinger places more than $1 billion in insurance premiums annually.
The parties said the transaction, structured as a tax-free reorganization, is expected to generate more than $100 million in annualized revenue across the three operating units and to generate approximately $40 million of annualized EBITDAC before integration costs, which are expected to range between $2 million to $3 million per quarter through 2014. Total net consideration is approximately $276.5 million (approximately $172 million in net cash plus the issuance of approximately 3.2 million Gallagher shares valued at approximately $140 million less the value of tax assets acquired).
Bollinger’s 6,000 commercial lines middle-market clients are expected to generate nearly $50 million in annualized revenues. The commercial lines business is primarily focused in real estate, education, municipalities and public entities, banking and financial institutions. Bollinger’s 42,000 personal lines clients are expected to generate nearly $20 million in annualized revenues from their middle market and high net worth families, which will fit well within Gallagher’s current personal lines business.
The combined retail property and casualty business will be led by Matt Gardner and will operate under the direction of Doug Brown, Gallagher’s Northeast region retail property and casualty brokerage leader.
Bollinger’s benefits business is expected to generate $20 million in annualized revenues. This operation provides retail employee benefit products and services to middle market clients, which mirrors Gallagher’s client base, and also operates on a wholesale basis through brokers in the tri-state area. Bollinger’s Specialty Benefits programs provide group insurance products to the higher education, K-12 and public entity markets on a proven platform around the country.
Chip Graber will continue to oversee the retail and wholesale operations and will report to David Ziegler, Gallagher’s Eastern region employee benefit brokerage and consulting leader. Alex Crispo will oversee the integration of the employee benefits TPA and MGU programs within Gallagher’s Northeast benefits units as well as provide administrative leadership for the broader New Jersey and New York property/casualty operations.
Bollinger’s Sports Programs division is expected to generate $10 million in annualized revenues. Bollinger’s exclusive MGU programs for golf and country clubs, and sports organizations are available in all 50 states on a retail and wholesale basis. As the result of this merger, the programs can be further expanded around the country using Risk Placement Services’ (RPS) distribution network. The programs division will be led by Lori Crispo and will operate under the direction of Greg Pellegrini, RPS’ programs leader.
Arthur J. Gallagher & Co. is headquartered in Itasca, Illinois, and has operations in 20 countries.