8-KAcquisitions & DispositionsMaterial AgreementsExhibits & Filings

Arthur J. Gallagher & Co. 8-K Report, Material Agreement (May 17, 2011)

Filed May 17, 2011For Securities:AJG

Summary

Arthur J. Gallagher & Co. (AJG) announced the completion of a significant acquisition through its subsidiary, Gallagher Holdings Two (UK) Limited. On May 12, 2011, Gallagher acquired all outstanding ordinary shares of HLGH, which operates as Heath Lambert, for a net cash consideration of approximately $158 million. Heath Lambert is a UK-based insurance broker specializing in property & casualty and employee benefit products. This strategic acquisition marks an expansion of Gallagher's international presence and service offerings. The transaction was structured with customary warranties and indemnification provisions. A portion of the purchase price, approximately $6.4 million, was placed in escrow to secure these obligations, with the sellers' liability capped at this amount. Additionally, Gallagher secured a warranty and indemnity insurance policy to cover general and tax warranties, with a deductible of approximately $0.8 million also held in escrow. The filing indicates the completion of this acquisition, which is expected to be accretive to AJG's business.

Key Highlights

  • 1Acquisition of Heath Lambert (HLGH) completed on May 12, 2011, for approximately $158 million in net cash consideration.
  • 2Heath Lambert is a UK-based broker specializing in property & casualty and employee benefit insurance.
  • 3The acquisition was made through AJG's subsidiary, Gallagher Holdings Two (UK) Limited.
  • 4The transaction includes customary warranties and indemnification provisions.
  • 5Approximately $6.4 million of the purchase price is held in escrow as security for indemnification obligations.
  • 6A warranty and indemnity insurance policy was obtained to back general and tax warranties.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce and provide details regarding Arthur J. Gallagher & Co.'s entry into and completion of a material definitive agreement, specifically the acquisition of HLGH (Heath Lambert).

Heath Lambert (HLGH) is a United Kingdom-based insurance broker that brokers property & casualty and employee benefit insurance products. AJG acquired Heath Lambert to expand its international presence and enhance its brokerage services in the UK market.

The net cash consideration for the acquisition of Heath Lambert was approximately $158 million. The filing does not detail the specific financing sources, but it indicates cash consideration was used.

AJG has incorporated customary warranties and indemnification provisions into the Share Purchase Agreement. Additionally, a portion of the purchase price ($6.4 million) is held in escrow to secure indemnification obligations, and AJG has purchased a warranty and indemnity insurance policy to cover general and tax warranties, with a deductible also held in escrow ($0.8 million).