Brown & Brown has signed a definitive agreement to merge the insurance operations of Riedman Corporation into Brown & Brown, Inc.’s operations. The transaction is expected to be effective Jan. 1 pending the completion of Brown & Brown’s due diligence and subject to certain other customary conditions.
Based on 1999 revenues, Riedman Corporation is the 26th largest insurance broker in the nation and the ninth largest privately held firm. Riedman operates more than 60 offices in thirteen states, principally in cities where Brown & Brown does not currently have an office location.
During 1999, Riedman reported $51.1 million of insurance-related revenues while Brown & Brown revenues totaled $176.4 million. Combined revenues for the year 2001 are expected to reach $250 million.
The transaction, structured as a purchase of all of Riedman Corporation’s insurance business-related assets, is expected to be accretive to Brown & Brown’s earnings and cash flow per share, and the purchase price calculation is believed to be generally consistent with industry standards for purchases of insurance intermediary organizations.
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