Summary
Brown & Brown, Inc. (BRO) announced the closing of its acquisition of certain assets and liabilities of The Hays Group, Inc. and its affiliates for a total consideration of $705 million. This comprised $605 million in cash and approximately 3.4 million shares of BRO common stock issued to key owners of the acquired entities. The cash portion was funded through a combination of operational cash and a significant $600 million borrowing under the Company's existing revolving credit facility. This strategic acquisition significantly expands BRO's footprint, particularly in employee benefits and claims management services. In connection with the transaction, the Company appointed Mr. James C. Hays, a principal of the acquired business, to its Board of Directors and as Vice Chairman of the Company. Mr. Hays received substantial cash and stock consideration for the acquisition, and his appointment as Vice Chairman includes a three-year employment agreement with a base salary of $517,000 and a bonus target of $700,000, with termination protections during the initial term. The issuance of shares was conducted under a private placement exemption, with recipients agreeing to a five-year lock-up period.
Key Highlights
- 1Brown & Brown completed the acquisition of The Hays Group, Inc. and affiliates for $705 million.
- 2Consideration included $605 million in cash and approximately 3.4 million shares of BRO common stock.
- 3The acquisition was financed partly by a $600 million draw on the Company's revolving credit facility.
- 4James C. Hays appointed to the Board of Directors and as Vice Chairman.
- 5Mr. Hays received significant cash and stock as part of the transaction.
- 6Mr. Hays has a three-year employment agreement with a base salary and bonus potential, with 'for cause' termination protection.
- 7Acquired entities expand BRO's capabilities in employee benefits and claims management.