Arthur J. Gallagher & Co. to acquire rival AssuredPartners in $13.4bn deal to redefine insurance industry

In a landmark transaction poised to reshape the insurance sector, Arthur J. Gallagher & Co. has announced its definitive agreement to acquire AssuredPartners for $13.45 billion. This acquisition, subject to customary regulatory approvals, is expected to close in the first quarter of 2025 and promises to significantly expand Gallagher’s middle-market property insurance and employee benefits offerings while driving substantial growth opportunities.

AssuredPartners, a leading U.S. insurance brokerage, was founded in 2011 and has since grown into a formidable presence in the industry. With 10,900 employees across 400 offices, the company reported $2.9 billion in revenue and $938 million in EBITDAC over the trailing 12 months ending September 2024. Arthur J. Gallagher & Co.’s Chairman and CEO, J. Patrick Gallagher Jr., highlighted the cultural and operational synergies that make this merger a strategic fit, emphasizing the shared commitment to entrepreneurial growth and client-first service.

Enhancing Middle-Market Property Insurance

This acquisition is expected to bolster Gallagher’s capabilities in the U.S. middle-market property insurance and employee benefits segments. By combining the expertise, data-driven analytics, and specialty product offerings of both companies, Gallagher aims to deliver superior value to clients in niche sectors such as transportation, energy, and healthcare.

Randy Larsen, CEO of AssuredPartners, expressed optimism about the merger, noting that it would bring unparalleled resources and industry insights to their clients while fostering further growth for employees and stakeholders. He described the deal as a natural progression for AssuredPartners, which has built its success on its entrepreneurial spirit and dedication to client satisfaction.

Key Financial and Strategic Details

Under the terms of the agreement, Arthur J. Gallagher & Co. will acquire AssuredPartners’ parent company from GTCR and Apax Partners. The gross transaction value of $13.45 billion includes an estimated $1 billion deferred tax asset, bringing the net consideration to $12.45 billion. This reflects a pro forma EBITDAC multiple of 11.3x after expected synergies.

Gallagher plans to finance the acquisition through a combination of long-term debt, short-term borrowings, free cash flow, and common equity. Despite the scale of the transaction, the company expects to maintain its investment-grade credit rating and continue its strategy of smaller tuck-in acquisitions.

Gallagher also anticipates recognizing $160 million in cost synergies over three years, offset by $500 million in integration expenses, including non-cash retention awards. These efficiencies, coupled with operational alignment, are expected to result in double-digit adjusted EPS accretion for Gallagher.

Cultural Compatibility Drives Success

The merger brings together two organizations with highly compatible cultures. Jim Henderson, Chairman of AssuredPartners, remarked on the shared entrepreneurial mindset and local community focus of both companies. He added that this alignment would benefit employees, clients, and trading partners alike, creating a foundation for long-term success.

Expanding Global Reach

In addition to strengthening its U.S. footprint, Gallagher will gain significant scale in the U.K. and Ireland, adding expertise and enhancing its presence in these regions. The acquired operations will also support Gallagher’s wholesale, reinsurance, and claims management businesses, enabling further growth across multiple verticals.

Arthur J. Gallagher & Co., headquartered in Rolling Meadows, Illinois, operates in approximately 130 countries. The company’s acquisition of AssuredPartners marks another milestone in its ongoing strategy to enhance client value through strategic growth and operational excellence.