Chicago-based Near North National Group owner Michael Segal will sell his firm’s insurance brokerage operations to Frontenac Co., a private equity investment firm also based in Chicago.
Segal, under federal indictment for insurance fraud, mail fraud and racketeering, signed a letter of intent to sell his brokerage business, which pulled in $107.1 million in revenues in 2001. Terms of the deal were not disclosed, and closing will follow an unspecified period of due diligence and other pre-closing business.
Frontenac Managing Partner Rodney L. Goldstein told Insurance Journal he began conversations with Near North President William Bartholomay, whom he has known for 15 years, in late 2002.
Goldstein said “we had several meetings with Mr. Segal” about the deal, and said Segal’s legal troubles had no impact on discussions.
“We’re purchasing assets of Near North Insurance Brokerage’s business,” Goldstein said. “We’ll be working closely with the operating team for that business. I would not comment on any other issue that involves Mr. Segal.”
Frontenac had been pursuing opportunities for investment in the insurance brokerage industry since last summer, when it teamed up with former Aon Corp. executives Richard A. Riley and Robert Goss, Goldstein said. Riley and Goss will become chief executive officer and chief financial officer, respectively, at closing.
“Our strategy is very simple,” Goldstein said. “We partner with proven operating executives. And Near North is precisely the kind of business that we and our executive partners would want to own. There’s a full operating team in place, terrific operating leadership and it has terrific growth potential.”