Arthur J. Gallagher & Co. | August 16, 2021
Arthur J. Gallagher & Co. today announced an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson plc. The transaction is expected to close during the fourth quarter of 2021.
"Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher and this acquisition will significantly enhance our global value proposition," said J. Patrick Gallagher, Jr., Chairman, President and CEO. "We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects. I look forward to welcoming the 2,200 new colleagues joining us as part of this transaction to our growing Gallagher family of professionals."
Benefits of the acquisition are expected to include:
Expanded global value proposition within reinsurance brokerage
A broad suite of analytics capabilities including actuarial services, catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
Addition of talented management team
Increased product breadth & offerings
Further leveraging of Gallagher's industry-leading alternative risk and ILS business
Strengthened relationships with major insurance carriers
The operations include all of Willis Re's treaty reinsurance brokerage operations. For the year ended December 31, 2020, these operations generated $745 million of estimated pro forma revenue and $265 million of estimated pro forma EBITDAC. The pro forma 2020 figures include revenues reported in Wills Re's 2020 unaudited financial information, and reflect known growth, as well as Gallagher's estimate of "breakage", defined as known lost business and the departure of key brokers and other employees, as well as normalization of operating expenses and additional investments. Willis Re's treaty reinsurance business operates in 24 countries, places over $10 billion of premium annually and represents over 750 insurance and reinsurance company clients.
Key Transaction Terms
Under the agreement, Gallagher will acquire the combined operations for an initial gross consideration of $3.25 billion, and potential additional consideration of $750 million subject to certain third-year revenue targets. Gallagher intends to finance the transaction using cash on hand, including the $1.4 billion of net cash raised via its May 17, 2021 follow-on common stock offering and the $850 million of net cash borrowed via its May 20, 2021 30-year senior note issuance, short-term borrowings and additional free cash generated before close. The funding contemplates Gallagher maintaining its investment grade debt rating.
Integration is expected to take approximately 3 years with total non-recurring integration costs estimated to be approximately $250 million. After giving effect to these assumptions and pro forma results discussed above, the acquired operations would have been approximately 5% accretive to Gallagher's 2020 adjusted GAAP EPS excluding earnings from clean energy investments and 9% accretive to Gallagher's 2020 adjusted GAAP EPS excluding amortization and earnings from clean energy investments.
Pro forma revenues – Pro forma revenues reflect Gallagher's estimate of revenues reported in the acquired operations' 2020 unaudited financial information, reflecting known growth, as well as "breakage", defined as known lost business and the departure of key brokers and other employees.
Other Cost Adjustments - In addition, specific costs have been identified as adjustments to the acquired operations' 2020 financial statements in order to better reflect Gallagher's estimate of pro forma. Specifically, these cost adjustments include the normalization of operating expenses to reflect the extraordinary impact of the COVID-19 pandemic in 2020 and additional investments in operations attributed to the target business based on the estimated costs to provide specific services from the center.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co. a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 57 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.
Insurance Data | September 30, 2020
Majesco, a global provider of insurance software solutions, today announced the launch of Majesco L&A Insurance Data & Analytics Platform, a powerful, data-driven solution that captures, analyzes and monetizes data to empower the L&A and Group Benefits business. The platform, which is pre-integrated with Majesco L&A Core Suite, leverages internal and external data with predictive and machine learning analytics to help insurers translate the data into transformational insights and actionable intelligence to meet the demands of their businesses today and tomorrow. In today’s digital age, data and analytics are the fuel for innovation and digital transformation, said Manish Shah, President and Chief Product Officer at Majesco. We want to enable carriers to leverage their operational and new, innovative sources of data that is both secure and easy to access, while putting insights directly in the hands of business to drive transformational, intelligent action. Our newly launched Majesco L&A Insurance Data & Analytics Platform provides a rich, robust solution to empower insurers to drive operational efficiency and effectiveness, as well as, innovation using these insights.
Cision PR Newswire | September 21, 2020
Thoma Bravo, L.P, a leading private equity firm focused on the software and technology-enabled services sectors, today announced that it has completed the acquisition of Majesco, a global leader of cloud insurance software solutions for insurance business transformation. As previously announced on August 8, 2020, under the terms of an amended and restated definitive merger agreement, Thoma Bravo agreed to acquire all of the issued and outstanding shares of Majesco common stock for $16.00 per share in cash.
In conjunction with the closing, Majesco's common stock will cease trading before the market opens on Tuesday, September 22, 2020 and the Company will no longer be listed on the Nasdaq stock exchange. Majesco will operate as a privately-held company.