8-KAcquisitions & Dispositions

Arthur J. Gallagher & Co. 8-K Report, Acquisition Completed (Jul 8, 2014)

Filed July 8, 2014For Securities:AJG

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.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the completion of Arthur J. Gallagher & Co.'s acquisition of Noraxis Capital Corporation.

Gallagher paid approximately C$420 million in net cash for 89% of Noraxis Capital Corporation's equity. The final price is subject to a post-completion balance sheet adjustment.

The acquisition was funded primarily through additional long-term borrowings and borrowings on Gallagher's revolving credit facility.

The acquisition significantly expands Gallagher's operations and market presence in Canada, integrating Noraxis's existing business and employee base into Gallagher's platform. This aligns with the company's strategy for international growth and market diversification.