Brown & Brown to Acquire Insurance Broker Beecher Carlson

May 22, 2013

Florida-based national insurance agency Brown & Brown Inc. has agreed to acquire Beecher Carlson Holdings Inc., an insurance and risk management broker with operations that include retail brokerage, program management and captive management, from Austin Ventures, FSPM and a group of individual employee and non-employee equityholders.

The transaction is expected to close in July of 2013 and is subject to customary closing conditions. The transaction will be a cash acquisition and is not subject to financing conditions.

The total net consideration is $336.5 million ($360 million in cash with adjustments for working capital and the value of net tax operating loss carryforwards).

Beecher Carlson Holdings Inc. reported that through its subsidiaries it had total annual net revenues for 2012 of $105.6 million. It has insurance and risk management clients in the fields of energy, financial services, healthcare, hospitality, manufacturing, public entities and real estate as well as tribal nations.

The large account division will remain intact, operating as Beecher Carlson under its current leadership based in Atlanta, Georgia. The middle-market retail offices in Oregon, Arizona and Mississippi will become part of the existing Brown & Brown Retail Division. The OnPoint programs will become a part of Brown & Brown’s National Programs Division.

The firms also said that as part of this transaction:

  • Steve Denton, Beecher Carlson’s current president, will be named a regional vice president of Brown & Brown Inc. and will serve as the CEO of Beecher Carlson.
  • Dan Donovan, Beecher Carlson’s current chief executive officer, will serve as executive chairman of Beecher Carlson.
  • Denton and Donovan will both be actively involved in the day-to-day operations of Beecher Carlson and will also join Brown & Brown Inc.’s Leadership Council.

“This transaction brings many exciting opportunities to Brown & Brown. Beecher Carlson enjoys an enviable position in the industry segments in which it operates, especially in the large account space,” said J. Powell Brown, CEO and president of Brown & Brown.

The original agency, Becher + Carlson, was formed in 1981 by William Becher and David Carlson, formerly senior officers of Risk Management Inc., a division of Emmett & Chandler, Los Angeles. Risk Management Inc. offered captive and alternative risk services.

Becher + Carlson remained an independent company until December 1989 at which time it was acquired by American Re-Insurance Co., a property/casualty reinsurer.

Key employees purchased the firm from American Re in 2003 and renamed it Beecher Carlson. In July 2004, after the purchase from American Re, the firm announced a $90 million capital commitment from private equity sources.

Brown & Brown, headquartered in Daytona Beach and Tampa, operates in 38 states and has a London office.

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