RSA sells Canadian broker to AJG

RSA has agreed to sell its shareholding in Canadian broker Noraxis Capital Corporation to Arthur J. Gallagher for C$500 million ($460 million) as part of its aim of tightening the strategic focus of the group.

Noraxis generated nearly C$125 million in revenue for the year ended December 31, 2013, has more than 650 employees and operates out of 23 offices.

Upon completion of the transaction, Gallagher will hold approximately 87 percent of the equity interests in Noraxis.

The remaining 13 percent will continue to be owned by various management employees of Noraxis. The transaction is subject to regulatory approval and is expected to close in July of 2014.

Stephen Hester, RSA Group chief Executive, said: “This disposal represents further progress against our aim of tightening the strategic focus of the Group, and brings to around £540 million the announced sales since our new strategy and action plan was unveiled in February.

“We are proud of the work that has been done to successfully build Noraxis, however, now is the right time for RSA to realise its investment. We will continue to evaluate further non-core disposals, some of which we expect to agree during 2014.”

J. Patrick Gallagher, chairman, president and chief executive officer, said: "In Noraxis, we have found our ideal Canadian partner and together we now have a solid platform for organic growth and a leadership team that will continue to attract new merger partners. By joining with Gallagher, Noraxis will be able to leverage our sales and service capabilities across Canada.

“By adding Canada to our recent expansion in Australia, New Zealand and the U.K., we are now well positioned in those countries to replicate our successful acquisition strategy of partnering with smaller, family-owned, and entrepreneurial agents and brokers."

Ken Keenan, Noraxis Group president, said: "From our earliest engagement, there has been genuine excitement right across our team at the prospect of joining Gallagher.  As a business built by acquiring brokers known to be the best in their geography and niche, we share an obvious client-first service ethos and entrepreneurial culture with Gallagher.”