Summary
Arthur J. Gallagher & Co. (AJG) has filed an 8-K report detailing the acquisition of the Oval Group of Companies on April 1, 2014. This strategic move involves acquiring Oval, an independent commercial insurance broker based in the United Kingdom with over 1,000 employees and 24 offices. The acquisition was completed on the same day the report was filed, signifying a significant expansion for Gallagher within the UK market. This acquisition was funded through a combination of existing cash and borrowings under AJG's revolving credit facility. The total net cash consideration for the acquisition is approximately £199.0 million, or $331.3 million, with portions held in escrow for warranty and balance sheet adjustments. This transaction is expected to enhance AJG's European presence and service offerings in commercial insurance brokerage.
Key Highlights
- 1Arthur J. Gallagher & Co. completed the acquisition of the Oval Group of Companies on April 1, 2014.
- 2The acquisition was made through Gallagher's subsidiary, Friary Intermediate Limited.
- 3Oval is a UK-based independent commercial insurance broker with over 1,000 employees and 24 offices.
- 4The net cash consideration for the acquisition is approximately £199.0 million (approx. $331.3 million).
- 5A portion of the purchase price (£2.1 million/$3.5 million) is held in escrow for three years as security for warranty obligations.
- 6Another portion (£5.0 million/$8.3 million) is held in escrow for approximately three months for balance sheet adjustments.
- 7The acquisition was funded by a combination of cash on hand and borrowings from AJG's revolving credit facility.