8-KMaterial AgreementsRegulation FDExhibits & Filings

Arthur J. Gallagher & Co. 8-K Report, Material Agreement (May 19, 2014)

Filed May 19, 2014For Securities:AJG

Summary

Arthur J. Gallagher & Co. (AJG) announced a significant acquisition on May 19, 2014, through a definitive agreement to purchase Noraxis Capital Corporation. This move will significantly expand AJG's presence in the Canadian insurance brokerage market, acquiring approximately 87% of Noraxis for a net cash consideration of C$422 million (approximately $388 million). Noraxis operates 23 offices across Canada with over 650 employees, representing a substantial addition to Gallagher's operations. AJG plans to finance this acquisition primarily through additional long-term borrowings and its revolving credit facility. The transaction includes standard representations and warranties, with seller indemnification subject to agreed-upon caps. Investors should note this strategic expansion into Canada and the proposed financing method as key aspects of the company's growth strategy.

Key Highlights

  • 1Arthur J. Gallagher & Co. (AJG) is acquiring Noraxis Capital Corporation, a Canadian insurance brokerage firm.
  • 2The acquisition involves approximately 87% of Noraxis's equity for a net cash consideration of C$422 million (approximately $388 million).
  • 3Noraxis operates 23 offices across Canada and employs over 650 individuals.
  • 4The deal is expected to strengthen AJG's position in the Canadian insurance market.
  • 5AJG intends to fund the purchase price mainly through new long-term borrowings and its existing revolving credit facility.
  • 6The acquisition agreement includes customary representations, warranties, and covenants, with limited seller indemnification.
  • 7A press release, the Share Purchase Agreement, and a slide presentation regarding the acquisition were filed with the SEC.

Frequently Asked Questions

The main purpose of this 8-K filing is to announce a material definitive agreement for Arthur J. Gallagher & Co. to acquire Noraxis Capital Corporation, a Canadian insurance brokerage firm.

AJG plans to fund the purchase price primarily through additional long-term borrowings and borrowings on its revolving credit facility under its unsecured multicurrency credit agreement.

This acquisition is strategically important as it significantly expands AJG's footprint in the Canadian insurance market by adding Noraxis's operations, which include 23 offices and over 650 employees across Canada.

Other than with respect to this acquisition and the continuing minority ownership interest held by Noraxis management employees, there is no material relationship between Gallagher and Roins Financial Services Limited (the Seller).