Summary
Arthur J. Gallagher & Co. (AJG) announced the completion of its acquisition of Noraxis Capital Corporation on July 2, 2014. Noraxis is a Canadian insurance brokerage firm with over 650 employees, significantly expanding Gallagher's footprint in Canada. The acquisition involved a net cash consideration of approximately C$420 million for 89% of Noraxis's equity, with the remaining equity retained by Noraxis management. This strategic move, funded primarily through long-term borrowings and its revolving credit facility, signals Gallagher's commitment to international growth and diversification within the insurance brokerage sector. Investors should view this as a potentially accretive move to earnings and a positive step for market share expansion.
Key Highlights
- 1Completion of Noraxis Capital Corporation acquisition on July 2, 2014.
- 2Noraxis Capital Corporation is a Canadian insurance brokerage firm with over 650 employees.
- 3AJG acquired approximately 89% of Noraxis's equity for net cash consideration of approximately C$420 million.
- 4The remaining 11% of Noraxis's equity will be held by its management employees.
- 5The acquisition was funded through a combination of long-term borrowings and drawings on its revolving credit facility.
- 6This acquisition expands Gallagher's presence and capabilities in the Canadian market.