Hilb Rogal & Hobbs Company (NYSE:HRH ), the eighth largest insurance and risk management intermediary, has signed a definitive agreement to acquire the stock of Smith, Bell & Thompson, Inc., a Vermont-based managing general underwriter (MGU) with 2003 revenue of more than $13.5 million. The transaction is expected to be completed by December 1, 2004. Terms of the transaction were not disclosed.
“The acquisition of Smith, Bell & Thompson, with its MGU expertise, is an important part of our growth strategy,” said Martin L. (Mell) Vaughan III, HRH chairman and chief executive officer. “The addition of Smith, Bell & Thompson underwriting and national programs will give our entire sales force access to additional products and services.”
With national specialty programs that include metal and plastics; social services; medical equipment and home healthcare; medical facilities; and specialty workers’ compensation, Smith, Bell & Thompson has helped a diverse client base manage risks for more than 75 years. Roger D. Teese, Smith, Bell & Thompson president, and his team of 78 insurance professionals will continue to serve clients from their office in Burlington, Vermont under the direction of Vaughan.
“When looking for a partner to perpetuate our growth as an organization, we looked for strong values and a culture that supports and encourages employees to do the best work of their careers,” said Teese. “We sought an organization that would, like us, value the many broker relationships we’ve garnered over the past 30 years. HRH is that partner. As the flagship of HRH’s program and captive management groups, Smith, Bell & Thompson not only reaps those benefits, but also gains intellectual capital, expanded underwriting capabilities and access to a diversity of markets.”
When completed, the transaction will be the ninth acquisition by HRH in 2004, and will bring annualized revenues acquired in the year to more than $80 million. HRH’s strategic goal is to acquire 5% to 10% of annualized revenues per year. All HRH acquisitions must be accretive to net operating earnings per share in the first year, Vaughan said.
Hilb Rogal & Hobbs Company had 2003 revenues of nearly $564 million. It operates from offices throughout the U.S. and in London.
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