Arthur J Gallagher to Acquire Cadence Insurance for $904M

Arthur J. Gallagher & Co. today said it has signed a definitive agreement with Cadence Bank to acquire Cadence Insurance, Inc. for $904 million cash.

Baton Rouge, Louisiana-headquartered Cadence Insurance, the second largest bank-affiliated insurance brokerage in the nation, offers a suite of commercial property/casualty, employee benefits, and personal lines products to clients from 34 offices in 9 different states across the Southeast, including Texas.

“Cadence Insurance is a fast-growing agency with strong niche capabilities across construction, real estate, manufacturing, healthcare, and professional services. With a similar culture, a high-performing team, and a significant Southeastern presence there are immense long-term growth opportunities as part of Gallagher,” said J. Patrick Gallagher, Jr., president and CEO.

Gallagher said the merger will also expand its reach in high-net-worth personal lines in the Southeast and Texas.

The Cadence Insurance team of about 800 led by Markham McKnight and Chris Boone will operate under the direction of Bumpy Triche, head of Gallagher’s Mid-South retail property/casualty brokerage operations and Robby White, head of Gallagher’s South-Central region employee benefits consulting and brokerage operations.

The acquisition is expected to close during the fourth quarter, pending to regulatory approval. As part of the transaction, Gallagher will become the preferred insurance broking partner of Cadence Bank.

“We have always liked the insurance business,” said Dan Rollins, chairman and of Cadence Bank, in a statement. “The sale will allow us to focus on what we do best – building strong, long-lasting banking relationships, while also continuing to realize our long-term strategy. I have enjoyed working with the Cadence Insurance team immensely and have profound respect for what they do, and how well they do it. On behalf of all of us at Cadence, we will miss them.”

M&A advisor MarshBerry recently pondered the future of bank-owned insurance brokers. The firm said the overall number of insurance brokerage acquisitions by banks has been on a decline over the last 15 years as private equity buyers push up valuations and tightening regulations prompt banks to rethink their strategies. Early this year, private equity firm Stone Point Capital bought a 20% stake in Truist Financial’s insurance brokerage business for close to $2 billion. Stone Point is now said to be interested in buying Truist Insurance Holdings for about $10 billion.

Topics Mergers & Acquisitions A.J. Gallagher