Business Moves

Hub, Apax, Morgan Stanley

Hub International Limited, which got its start in 1998 when 11 Canadian brokers merged and has since grown through acquisitions into one of the largest insurance brokers in North America, is being acquired by funds advised by Apax Partners together with Morgan Stanley Principal Investments in a transaction worth $1.8 billion.

Hub shareholders will receive $40.00 per share in cash, representing a premium of 28 percent to the 90-trading day average closing stock price on the New York Stock Exchange. The transaction values Hub at approximately $1.8 billion, which includes $1.7 billion of fully diluted equity and $145 million of debt.

There is no financing condition to consummate the transaction. The transaction will be financed through equity contributed by Apax, MSPI and members of management, and debt financing that has been committed by Morgan Stanley and Merrill Lynch & Co. Senior members of Hub’s management team have already committed to invest in excess of $65 million in the transaction, which should close toward the end of the second quarter of 2007.

Royal Sun, Arrowpoint

Arrowpoint Capital Corp. in Charlotte, N.C. has completed the acquisition of all Royal & SunAlliance USA businesses formerly owned by Royal & Sun Alliance Insurance Group plc of London. Arrowpoint Capital Corp. was formed in June 2006 by the senior management and outside directors of Royal & SunAlliance USA. Arrowpoint agreed to terms of the transaction approved by Delaware Insurance Commissioner Matthew Denn.

Arrowpoint Capital management purchased 100 percent of the interests of Arrowpoint General Partnership, the U.S. holding entity which owned the R&SA USA businesses, for $300 million of deferred consideration. At the close, the London group contributed $287.5 million to the U.S.-regulated entities.

The company is being led by former R&SA USA President and CEO John Tighe and his senior managers, who have headed the U.S. operation since 2003. The Arrowpoint board will include Michael Crall, formerly CEO of Equitas and president of Argonaut Insurance Co., who serves as chairman; Edward Muhl, former New York and Maryland insurance commissioner; and Larry Simmons, former president and CEO of Royal & Sun Alliance Insurance Co. of Canada and Western Assurance Co.

Denn approved the management buyout last month in ruling that there is essentially no legal or financial basis upon which he could reject the buyout; although he required that Royal UK agree to certain conditions. Denn required that the British parent company submit to the jurisdiction of his department and Delaware state courts for any policyholder disputes. He also wanted the company to obtain state approval for certain payouts to management.

While Royal & Sun’s British put $287.5 million into the buyout, it said it will not supply any additional funds for the U.S. Some policyholders, including World Trade Center lessees contended that $287.5 million might not be sufficient to cover outstanding World Trade Center, asbestos and other potential claims. But Denn ruled that the it should be sufficient to pay unresolved claims.

All Risks, Orlando

All Risks Ltd., a national wholesale broker headquartered in Hunt Valley, Maryland, opened its sixteenth branch office in metropolitan Orlando. The Orlando office joins other Southeast branches in Atlanta, Ga., Ft. Lauderdale, Fla., Jupiter, Fla., and Tampa, Fla. The Orlando office will be staffed by Liz Henderson, an underwriter with 17 years of insurance experience, and Leah Moss, who has 20 years of industry experience.

USI Holdings, H.W. Gates Agency

USI Holdings Corp. acquired the Memphis, Tenn.-based H.W. Gates Agency Inc. serving the Memphis metro area. Gates is expected to contribute approximately $1.0 million of revenues to USI on an annual basis. USI is headquartered in Briarcliff Manor, N.Y., and operates out of 66 offices in 18 states.

Appalachian Underwriters, Tennessee

Insurance broker Appalachian Underwriters said it intends to double its Knoxville-Oak Ridge Innovation Valley, Tenn., presence to more than 300 people after moving to new headquarters in Oak Ridge. Appalachian Underwriters is a subsidiary of Insurance Service Group of Clinton, Tenn.

Carlson, T.R. Jones & Co.

Privately-held insurance agency T.R. Jones and Co., along with its affiliate, Kraft Insurance Agency of Winter Park, Fla., merged with Atlanta-based broker Beecher Carlson. The transaction expands Beecher Carlson’s presence in Florida and its access to hospitality, healthcare and construction industry accounts, areas of expertise for Beecher Carlson, T.R. Jones and Kraft.

T.R. Jones is led by Tom Jones, president and chief executive officer, and Alan Lund, executive vice president, both of whom will retain their positions. Bill McCormick will remain as vice president of Kraft. The agency will continue to do business as T.R. Jones and Kraft.

Topics USA