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.