Arthur J Gallagher acquires Oval Group
Broker Arthur J. Gallagher has acquired the Oval Group of Companies, an independent commercial insurance broker.
Oval has over £80 million in annualised revenue operating out of 24 offices throughout the UK.
Gallagher expects to finance the transaction using free cash and borrowings on its line of credit.
The transaction is expected to generate over £80 million in annualised revenue and over £22 million of annualized EBITDAC (before integration costs) growing to £27 million in 2016 reflecting operational synergies.
Integration costs are expected to range between £1.5 million to £2 million per quarter through 2015, and less than £1 million per quarter during 2016. Total net consideration is approximately £199 million payable in cash.
Peter Blanc will lead Gallagher's combined UK retail division, and Oval's benefits and wealth management business will become part of Gallagher's UK-based benefit and consulting specialist operations, led by Tim Johnson.
Patrick Gallagher, chairman, president and chief executive officer, said: "Oval will significantly expand our retail distribution and firmly positions Gallagher as a top three U.K. retail commercial broker operating from 70 locations. Our combined operations will also make us the largest retail broker in several key U.K. locations.
"With the addition of over 1,000 Oval associates, we will add extensive expertise and experience to our upper and middle-market client capabilities. We are extremely pleased to welcome Peter Blanc and his colleagues to our growing Gallagher family of professionals."
Peter Blanc, Oval's chief executive officer, added: "I'm incredibly excited at the prospect of harnessing the combined strength of Oval and Arthur J. Gallagher for the benefit of all of our clients spread across the UK. Together, we expect to deliver unparalleled service and expertise in the ever changing insurance brokerage marketplace and continue our common strategies of growing organically and through complementary mergers. Equally exciting is that we share a very similar culture that is constantly looking to improve our productivity, enhancing our service and maintaining a dynamic and cohesive sales culture."
