Insurance brokerage and risk management services firm Arthur J.
Gallagher & Co has acquired Ohio-based Sigma II Insurance Agency. Terms of the deal have not been disclosed.
That makes no fewer than 27 completed acquisitions by Gallagher through the end of the third quarter, and now 29.
President and CEO J Patrick Gallagher, Jr said that acquisitions completed over the past couple of years are doing very well and are steadily being integrated into operations – and he’s looking for more. More specifically, in the US he looks for companies typically with revenues of $2 million to $10 million a year that would be able to improve their operations and performance as a result of becoming part of Gallagher.
Gallagher noted that some competitors are buying larger businesses and paying higher multiples, but that Gallagher’s acquisition model seems to be working, which is to try to pay between six and seven times earnings for companies it acquires.
The company prefers to use cash for acquisitions. “We always want to use cash first,” said Gallagher, adding that the company’s pipeline for acquisitions is strong going forward.
This year’s acquisitions represent about $180 million annually in new revenue for Gallagher. The company saw 9% growth in revenues in the third quarter, including 10% growth in the brokerage business.
Established in 1988, Sigma II Insurance Agency (Sigma II) is an employee benefits consultant, which provides a broad range of employee benefits products and consulting services to commercial and individual clients across the Midwest. The agency also offers group health, welfare and ancillary benefits, executive benefits and individual health insurance services for the professional, manufacturing and service industries.
Under the leadership of Gallagher's North Central employee benefit brokerage and consulting operations head William Ziebell, Sigma II’s team will continue to operate from its greater Cleveland location.
Gallagher said: "The Sigma II team is highly regarded for their benefit expertise as well as their commitment to anticipate and provide benefit solutions that cover the special needs of each client. They also have a sales culture that emphasizes a quality approach to client service, which matches ours."
In September, AJG acquired North Alabama Insurance (NAI), which is a managing general agent and wholesale insurance broker, offering property/casualty, commercial auto/garage and other specialty insurance services across the south central US.
Gallagher operates across the US and in about 140 countries.
