Brown & Brown, Inc. to Acquire Uniondale Based Wright Insurance Group, LLC
Brown & Brown, Inc. to Acquire Uniondale Based Wright Insurance Group, LLC
DAYTONA BEACH, FL and TAMPA, FL—J. Powell Brown, Chief Executive Officer and President of Brown & Brown, Inc. (NYSE: BRO), announced that Brown & Brown, Inc. has entered into a merger agreement to acquire The Wright Insurance Group, LLC (“Wright”).
This transaction brings to Brown & Brown a substantial presence in the national flood insurance program (NFIP) and a premier service provider for governmentsponsored insurance programs and proprietary national and regional programs (collectively, the “Programs Business”) with 2013 net adjusted revenues of $114 million (adjusted for certain divestitures to occur prior to closing).
The merger allows for growth initiatives that will concentrate on leveraging Wright’s market expertise, tenured client relationships and infrastructure and joins in one organization two highly compatible sales and service cultures.
As part of this transaction Wright’s current operational leadership team will remain in place and will continue to operate from offices in Uniondale, Albany, New York and St. Petersburg, Florida.
Wright’s public entity/program services/ specialty operations in New York will report to Tony Grippa (Regional Vice President) and Wright’s flood program operations will report to Chris Walker (Regional Executive Vice President). All of Wright’s operations will become part of Brown & Brown’s National Programs Division.
According to the Company, pro-forma projected net revenues of $121 million and projected EBITDA of $58.8 million for the first twelve months of operation of the Wright companies after closing.
Estimated earnings per share growth of $.09 to $.10 is expected in the next fiscal year. Powell Brown stated, “Wright Insurance Group has an enviable history of solid growth and impeccable client service. With the support of its lead equity partner, Aquiline Capital Partners, Wright added a unique asset with a national position in the Wright WYO flood program. We look forward to the opportunities ahead combining the skills and expertise of our new Brown & Brown teammates from Wright with the Brown & Brown platform to continue to serve Wright’s valued client base.” Jeff Greenberg, Chief Executive of Aquiline said, “We have enjoyed working with Brown & Brown on this transaction and admire the firm and its leadership. They are an ideal owner of Wright and share our positive outlook for the business and appreciation for the quality of the existing management team. We are pleased the employees and clients of Wright will be in such capable hands.”
The total net consideration to be paid for the ownership interests of Wright is $602.5 million. This amount is comprised of cash payments of $587.5 million for the Programs Business, $7.5 million for Wright National Flood Insurance Company (“WNFIC”) and $7.5 million for WNFIC statutory surplus. Brown & Brown anticipates the transaction will yield future tax benefits in the amount of $108 million. In addition, contingent consideration of up to $37.5 million may be payable if Wright completes certain agreed upon acquisitions prior to closing. The transaction is expected to close in April of 2014 and is subject to customary closing conditions, including Hart-Scott-Rondino approval and related regulatory approvals. The transaction will be a cash acquisition (utilizing free cash and existing debt sources) and is not subject to financing conditions. The total consideration does not reflect any one-time transaction expenses.
Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and related services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services. Serving business, public entity, individual, trade and professional association clients nationwide, Brown & Brown is ranked by Business Insurance magazine as the United States’ seventh largest independent insurance intermediary.
The Wright Insurance Group is a fee-based specialty insurance services company that underwrites and administers complex property and casualty risks through three distinct segments: (i) Wright Flood, (ii) program services servicing reciprocals and self-insured groups and (iii) managing general agent services. Brown & Brown’s web address is www.bbinsurance.com. Wright’s current operations can be reviewed at Wright’s web address located at www.wrightinsurance.com/companies.
[M&A UPDATE]
Brown & Brown, Inc. to Acquire Uniondale Based
Wright Insurance Group, LLC
DAYTONA BEACH, FL and TAMPA,
FL—J. Powell Brown, Chief
Executive Officer and President of
Brown & Brown, Inc. (NYSE: BRO),
announced that Brown & Brown, Inc. has
entered into a merger agreement to acquire
The Wright Insurance Group, LLC
(“Wright”).
This transaction brings to Brown &
Brown a substantial presence in the national
flood insurance program (NFIP) and a
premier service provider for governmentsponsored
insurance programs and proprietary
national and regional programs
(collectively, the “Programs Business”)
with 2013 net adjusted revenues of $114
million (adjusted for certain divestitures
to occur prior to closing).
The merger allows for growth initiatives
that will concentrate on leveraging Wright’s
market expertise, tenured client relationships
and infrastructure and joins in one
organization two highly compatible sales
and service cultures.
As part of this transaction Wright’s current
operational leadership team will remain
in place and will continue to operate from
offices in Uniondale, Albany, New York and
St. Petersburg, Florida.
Wright’s public entity/program services/
specialty operations in New York will
report to Tony Grippa (Regional Vice
President) and Wright’s flood program
operations will report to Chris Walker
(Regional Executive Vice President). All of
Wright’s operations will become part of
Brown & Brown’s National Programs
Division.
According to the Company, pro-forma
projected net revenues of $121 million and
projected EBITDA of $58.8 million for the
first twelve months of operation of the
Wright companies after closing.
Estimated earnings per share growth
of $.09 to $.10 is expected in the next fiscal
year. Powell Brown stated, “Wright Insurance
Group has an enviable history of solid
growth and impeccable client service. With
the support of its lead equity partner,
Aquiline Capital Partners, Wright added a
unique asset with a national position in the
Wright WYO flood program. We look forward
to the opportunities ahead combining
the skills and expertise of our new Brown
& Brown teammates from Wright with the
Brown & Brown platform to continue to
serve Wright’s valued client base.”
Jeff Greenberg, Chief Executive of
Aquiline said, “We have enjoyed working
with Brown & Brown on this transaction
and admire the firm and its leadership.
They are an ideal owner of Wright and
share our positive outlook for the business
and appreciation for the quality of the existing
management team. We are pleased the
employees and clients of Wright will be in
such capable hands.”
The total net consideration to be paid
for the ownership interests of Wright is
$602.5 million. This amount is comprised
of cash payments of $587.5 million for the
Programs Business, $7.5 million for Wright
National Flood Insurance Company
(“WNFIC”) and $7.5 million for WNFIC
statutory surplus. Brown & Brown anticipates
the transaction will yield future tax
benefits in the amount of $108 million. In
addition, contingent consideration of up to
$37.5 million may be payable if Wright
completes certain agreed upon acquisitions
prior to closing. The transaction is expected
to close in April of 2014 and is subject to
customary closing conditions, including
Hart-Scott-Rondino approval and related
regulatory approvals. The transaction will
be a cash acquisition (utilizing free cash and
existing debt sources) and is not subject to
financing conditions. The total consideration
does not reflect any one-time transaction
expenses.
Brown & Brown, Inc., through its subsidiaries,
offers a broad range of insurance
and reinsurance products and related services.
Additionally, certain Brown & Brown
subsidiaries offer a variety of risk management,
third-party administration, and other
services. Serving business, public entity,
individual, trade and professional association
clients nationwide, Brown & Brown is
ranked by Business Insurance magazine as
the United States’ seventh largest independent
insurance intermediary.
The Wright Insurance Group is a feebased
specialty insurance services company
that underwrites and administers complex
property and casualty risks through three
distinct segments: (i) Wright Flood, (ii) program
services servicing reciprocals and selfinsured
groups and (iii) managing general
agent services. Brown & Brown’s web
address is www.bbinsurance.com. Wright’s
current operations can be reviewed at
Wright’s web address located at
