Acquisitions help drive Arthur J. Gallagher growth

Broker Arthur J. Gallagher enjoyed strong growth of some 20 percent across the business in the first quarter of 2014 compared with the same period the year before driven partly by organic growth but also driven by its acquisition activity.

Its brokerage and risk management businesses combined grew by 20 percent in adjusted total revenues hitting $727.6 million compared with $605.9 million the year before. The brokerage segment alone grew by 24 percent and the risk management business by 7 percent. The company’s total revenues reached $915 million for the quarter compared with $674.1 million the year before.

Under the accountancy term EBITDAC, which Gallagher defines as net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables, the broker made $120.5 million across the business as a whole compared with $98.3 million the year before.

“We are off to an excellent start in 2014,” said J. Patrick Gallagher, chairman, president and CEO. “Our revenue momentum continues; our combined brokerage and risk management segments posted 20 percent growth in adjusted total revenues, 4 percent organic growth in commissions and fee revenues, and already in 2014 we have announced ten mergers with annualised revenues of approximately $153.6 million.

“In the quarter we also improved our adjusted margins by 120 basis points, and we delivered 28 percent growth in adjusted EBITDAC and 22 percent growth in adjusted net earnings per share.”