Summary
Arthur J. Gallagher & Co. (AJG) announced on August 12, 2013, the acquisition of Bollinger, Inc., a significant player in the retail property and casualty insurance brokerage, wholesale brokerage, program management, and employee benefits consulting sectors. This strategic move strengthens AJG's presence with approximately 500 employees and eight offices across New Jersey, New York, Pennsylvania, and Connecticut. The acquisition was structured as a merger where Bollinger Holdings, Inc. merged into AJG's subsidiary, JPGAC, LLC. The total consideration for the transaction amounted to approximately $172 million in cash, which was used to retire Bollinger's existing debt and cover transaction costs, with the remainder distributed to Bollinger's shareholders. Additionally, AJG issued $140 million worth of its common stock (3,177,486 shares) to the Bollinger shareholders as part of the merger consideration. The cash portion of the payment was funded through a combination of operational cash and existing credit facilities.
Key Highlights
- 1Arthur J. Gallagher & Co. acquired Bollinger, Inc., a diversified insurance broker and benefits consultant, on August 12, 2013.
- 2The acquisition expands AJG's geographic footprint and service offerings with Bollinger's 500 employees and eight offices in New Jersey, New York, Pennsylvania, and Connecticut.
- 3The total transaction consideration was approximately $172 million in cash, used to repay debt and cover expenses, plus $140 million in AJG common stock.
- 4The deal was structured as a merger of Bollinger Holdings, Inc. into AJG's subsidiary, JPGAC, LLC.
- 5AJG funded the cash portion of the acquisition through its existing cash reserves and borrowings under its credit agreement.
- 6A customary post-closing working capital adjustment to the merger consideration is anticipated.
- 7A portion of the merger consideration ($22 million) was placed in escrow to secure indemnification obligations related to customary warranties and covenants within the agreement.