GBS staffers released from contractual restrictions as they join rival for undisclosed sum.
Arthur J Gallagher UK chief executive David Ross has said that the 18 staff it acquired from Heath Lambert’s Global Business Solutions unit would deliver immediate profits for the company.
The staff, who formed the majority of Heath’s GBS unit, were transferred to Gallagher last week for an undisclosed sum.
Heath Lambert will now close down the unit, which has fewer than 10 staff remaining, who may be deployed elsewhere in the business.
Sources close to Heath Lambert said that GBS, which has a brokerage approaching £5m, posted a loss of £250,000 last year.
However a spokesman for Gallagher insisted that the front office staff who had been taken on would immediately turn a profit for their new employer.
Ross said: “We have hired 18 highly skilled front office professionals from Heath Lambert who will benefit immediately from the existing Gallagher superstructure, and hit the ground running.”
"Even after associated transfer costs, the deal fits comfortably into our profitability guidelines."
His comments follow the news, as reported in Insurance Times, that Heath Lambert was looking to sell the unit to complete its shift towards retail broking. It comes after aborted talks between Cooper Gay and Heath Lambert to include GBS in the deal that saw Heath's reinsurance, aerospace and UK wholesale operations transfer to Cooper Gay for a sum in the region of £6m.
Cooper Gay chief executive Toby Esser recently said the elements of the acquired business were loss making, but said that he expected them to be restored to profitability.
“Even after associated transfer costs the deal fits comfortably into our profitability guidelines.
David Ross, Arthur J Gallagher
In a statement, Heath Lambert said the employees from GBS had joined Gallagher for an undisclosed sum, and had been released from any contractual restrictions.
Sources close to Heath added that the amount paid by Gallagher was greater than Cooper Gay’s offer for the unit.
A spokesman for Heath insisted that the company’s international footprint had not been adversely affected by the sale of GBS.
Following the sale of its non-core assets, Heath’s brokerage now stands in the region of £100m.
Despite a decline in premiums of £15m from its wholesale operations – driven in part by the defection of a team from UK wholesale division, FSJ, to THB – Heath posted unaudited 2007 earnings before interest, tax, depreciation and amortisaition of £18.5m.
A spokesman for Heath said that the company planned to open a number of new offices this year while bringing its existing national, project risks, major accounts, and art and private clients divisions into closer alignment.
She said a number of new positions had been created, and the company planned to move into some new business lines. The broker is also understood to have signed a major deal that will involve a number of its divisions.
Heath has around 1,600 employees in the UK, spread across 21 locations.