£97m deal should push combined firm into UK's top 10
Gallagher has stormed into the top 10 UK broker list after paying £97m in cash for Heath Lambert.
The pair’s combined brokerage of £170.4m – based on figures used for last summer’s Insurance Times Top 50 – looks set to push Bluefin out of ninth place in this year’s ranking. But their combined brokerage for this year is approaching £200m.
Gallagher’s takeover was completed after months of negotiation with preference shareholders owed £39m in preference shares and £15.5m in unpaid dividends.
Two of the main shareholders, The Royal Bank of Scotland and the Pension Protection Fund, could earn up to £30m from the deal.
Under the new arrangements, Heath Lambert chief executive Adrian Colosso will run the UK retail operation, reporting into Gallagher International chief executive David Ross.
Gallagher predicts that by 2013 the acquisition will earn £20m in earnings before income tax, depreciation, amortisation and non-cash equity compensation.
Chairman Patrick Gallagher said: “This represents an important strategic move for our company.
“Since 1974, we’ve been in London primarily as a wholesale broker. Heath Lambert offers us an excellent opportunity to become a large retail broker in one of the best insurance markets in the world.
“Its team shares our culture and its product and service capabilities are an excellent fit with our US and international retail operations.”
Ross added: “Heath Lambert gives us a solid platform to grow our broker ranks through targeted recruitments and mergers.”