The parent company of managing general agent San Diego, Calif.-based Arrowhead General Insurance Agency Inc. has entered into an agreement to be acquired by Brown & Brown Inc.
The purchase price is $395 million, subject to adjustments for certain items such as Arrowhead’s working capital, debt and net tax operating losses. An additional payment of up to $5 million may be made three years after closing, depending on Arrowhead’s EBITDA during the last year of that period.
Daytona Beach, Fla.-based Brown & Brown is acquiring Arrowhead from Spectrum Equity Investors, JMI Equity and a management equity holder group. The transaction is expected to close in January and is subject to customary closing conditions, including regulatory approval. The transaction will be a cash transaction and is not subject to financing conditions.
Arrowhead, together with its subsidiary, American Claims Management, Inc. (ACM), a third-party claims administrator, and its other subsidiaries, is expected to have total annual 2011 net revenues of approximately $105 million.
As part of this transaction, Arrowhead and ACM will continue to operate in their current locations in the greater San Diego area. Alexander Anthony Insurance LLC, an Arrowhead subsidiary, will continue to operate in its Salt Lake City, Utah location.
Brown & Brown, through its subsidiaries, offers insurance and reinsurance products and related services. Additionally, certain Brown & Brown subsidiaries offer risk management, third-party administration, and other services.
Shares of Brown & Brown were up 13 cents to $21.89 in early trading on the New York Stock Exchange.
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