Gallagher acuerda un acuerdo multimillonario para adquirir activos de WTW

 Gallagher agrees to multi-million dollar deal to acquire WTW assets

The insurance industry is only just coming to terms with the jolt that was the collapse of the proposed  Aon - Willis Towers Watson  mega-merger, but another major acquisition is already on the cards. Arthur J. Gallagher  & Co. (Gallagher) has today announced an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson plc.

The deal is expected to close during the fourth quarter of 2021 and is subject to customary regulatory approvals.

Commenting on the agreement, J. Patrick Gallagher, Jr., Gallagher's president, president and CEO noted that expanding its reinsurance brokerage offerings has been a strategic objective for the group and that the agreement will "significantly improve" its proposed global value.

 "We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and we strongly believe that a combination will significantly enhance our offerings to clients and prospects," he said. "I look forward to welcoming the 2,200 new colleagues who join us as part of this transaction for our growing family of Gallagher professionals."

Acquired operations

Under the terms of the agreement, the acquired operations include all of the Willis Re treaty reinsurance brokerage operations. For the full year 2020, these operations generated $ 745 million of estimated proforma revenue and $ 265 million of estimated proforma EBITDAC. Willis Re's treaty reinsurance business serves the market in 24 countries, represents more than 750 clients of insurance and reinsurance companies, and places more than $ 10 billion in premiums annually.

Key transaction terms

The transaction will see Gallagher acquire the combined operations for an initial gross consideration of $ 3.25 billion and a potential additional consideration of $ 750 million subject to certain third-year revenue targets.

 

Gallagher will seek to fund the deal with cash on hand, including the $ 1.4 billion of net cash raised through its follow-up common stock offering on May 17, 2021 and the $ 850 million of net cash loaned through its 30-year senior from May 20, 2021. issuance of promissory notes, short-term loans and additional free cash generated before closing. The financing provides for Gallagher to maintain its investment grade debt rating.

 

The integration of the two businesses is expected to take approximately three years with total non-recurring integration costs estimated at approximately $ 250 million.

 

Acquisition benefits

Exploring the benefits of the deal in a press release, Gallagher noted that his purchase will offer him an expanded global value proposition within reinsurance brokerage, as well as the addition of a talented management team and a greater variety and offering of products.

 

Other key benefits include the broad set of analytical capabilities boasted by Willis Re's reinsurance brokerage operations, increased leverage of Gallagher's industry-leading ILS and alternative risk business, and strengthened relationships with leading insurance companies. .

 

 

 

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