Brokers’ Stocks Up Slightly for the Year; Banks Active in Brokerage M&As

September 1, 2008

Stock Prices: The brokerage sector as a whole is up 2 percent for the year. Arthur J. Gallagher’s (NYSE:AJG) stock has faired well compared to peer Brown & Brown (NYSE:BRO). Gallagher’s stock is up 6.5 percent year-to-date while Brown & Brown’s is down 25 percent.

M&A Activity: Banks were active during July in the brokerage sector. Three banks were acquirers while two others were sellers. BB&T Insurance Services plans to expand its coastal South Carolina operation with the acquisition of the Grand Strand’s largest insurance agency. Puckett, Scheetz & Hogan, a coastal property insurance specialist with 50 employees, provides a full range of risk management services for businesses and families from its Myrtle Beach headquarters and a branch office in nearby Pawleys Island. The merger would give BB&T the largest insurance market share in greater Myrtle Beach.

Pinnacle Financial Partners Inc. (Nasdaq:PNFP) announced its acquisition of Murfreesboro, Tenn.-based Beach & Gentry Insurance LLC. Beach & Gentry will merge with Miller & Loughry Insurance & Services Inc., a wholly-owned subsidiary of Pinnacle Financial Partners, also located in Murfreesboro. Beach & Gentry, founded in 1972, has 18 associates and 4,000 clients. Miller & Loughry, the oldest independent insurance agency in Murfreesboro, was founded in 1949 and has 22 associates and 6,300 clients.

NBT Bancorp Inc. (Nasdaq:NBTB) has signed a definitive agreement to acquire Mang Insurance Agency. Headquartered in Binghamton, N.Y., Mang is one of the largest independent agencies in upstate New York and offers all types of insurance to individuals and businesses from locations in 16 upstate New York communities.

On the sell side, Gunn-Mowery announced the signing of a definitive agreement with Susquehanna Bancshares (Nasdaq:SUSQ) to acquire the assets of Community Banks Insurance Services and its previously acquired insurance agencies. The acquisition will add 16 employees. The combined firm will manage $60 million of insurance premiums, $7 million in annual revenues, and will include 58 employees.

Finally, Charlotte, N.C.-based Barry, Evans, Josephs & Snipes, a financial services firm serving the insurance and financial services needs of high net worth individuals and successful corporations, announced it has reestablished itself as an independent firm following the purchase of the company name, certain accounts and other assets from Wachovia Corp. (NYSE:WB) Founded in 1982, Barry, Evans, Josephs & Snipes Inc. had been operating as a Wachovia subsidiary since 1999.

Public broker consolidation continued in June. Hilb Rogal & Hobbs Co. (NYSE:HRH), following the 2007 acquisitions of Hub International and USI Holdings, announced they too would be acquired. Willis Group Holdings Limited (NYSE:WSH) and Hilb Rogal & Hobbs Co. announced the companies will combine forces in a transaction that will double Willis’ North America revenues and strengthen its leadership in attractive growth markets. Under the terms of the definitive agreement, Willis will acquire all of the outstanding shares of common stock of HRH for $46.00 per share, 50 percent cash and 50 percent stock, subject to a collar, in a transaction having an equity value of approximately $1.7 billion and an enterprise value of approximately $2.1 billion.

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Insurance Journal West September 1, 2008
September 1, 2008
Insurance Journal West Magazine

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