Hub to Purchase Assets of Beleaguered Near North

Chicago-based brokerage Hub International Ltd. announced that it has signed a proposal to purchase substantially all of the brokerage operation assets, primarily insurance relationships with customers and insurers, of Windy City neighbor Near North National Group. The proposal to purchase has been approved by the board of directors of Near North.

Terms of the transaction will be disclosed upon execution of a definitive agreement. Share of Hub rose 10.6 percent, or $1.76, to $18.56 in trading on the New York Stock Exchange.

Hub did indicate that it is an arrangement in which all of the total purchase price (except certain assumed liabilities) will be paid on the basis of future revenues from the acquired assets. Completion of the transaction is subject to further due diligence, negotiation and execution of a definitive agreement and customary regulatory approvals and conditions.

Near North operations include property and casualty insurance brokerage, employee benefits and life insurance consulting, structured settlement services and facultative reinsurance intermediary operations primarily located in Chicago, Los Angeles, New York, Las Vegas, Arlington, Virginia and Dallas.

Hub indicated that due diligence would include discussion with appropriate regulatory organizations and other government entities. It did not indicate whether the purchase is contingent on the results of a federal trial against Near North, its owner Michael Segal and a Segal accountant on charges of racketeering and insurance fraud for the alleged embezzlement of more than $20 million from a Near North premium trust fund account.

Segal had signed a letter of agreement to sell the brokerage to Chicago equity firm Frontenac Co., but that deal unraveled last week.
Hub will be discussing the asset purchase of Near North and its second quarter earnings results and updated guidance on a conference call scheduled for 10:30 a.m. EDT, July 31.