UK retail chief Michael Rea explains the boost to Gallagher’s UK regional footprint
Gallagher’s acquisition of Bollington will ‘supercharge’ its presence in the north west, according UK retail chief executive Michael Rea.
The deal is understood to cost Galllagher around £250m, a similar size to the Stackhouse Poland deal two years ago, but no official figures are released.
Speaking to Insurance Times following the deal announced earlier today, Rea said: ”Bollington is a really good business. I’ve known the management team for a number of years and it is a good strategic fit.
”They have expertise in a number of niche areas. Geographically, they are in the north west, where we have a number of businesses, but it supercharges our presence there.”
Rea said that the Stackhouse Poland deal two years ago strengthened Gallagher’s footprint in south England.
In a similar way, Rea said Bollington will ’double our presence’ in the north west where there are already Gallagher offices in Liverpool, Manchester, Sale and Chester.
Bollington also has offices in the north east, and in the West Midlands following last year’s purchase of commercial broker CLA.
Product fit
Explaining the product fit with Gallagher, Rea said: “What they are known for at their heart, is motor trade and corporate motor trade, so that’s clearly a centre which will play in, but we don’t have their level of expertise or experience in that space. So motor trade is probably number one.
“They have a sizeable presence in the care home space. Again that is really complementary. We have a presence but not on their scale.
”And interestingly, they bring expertise in commercial van, which is typically sold in a very direct environment.
”We are a very big broker in the SME world, but actually, their expertise in vans is really complementary to where we are really strong which tends to be on the property side of SME. So that’s quite a nice fit.
”Their corporate account business is really complementary to what we have in our branch network but also they bring in the micro-SME space digital capability which will be added to the way we distribute SME, so I think that is a really exciting opportunity for us.
“So they complement our areas of specialisms, and they bring a little bit extra in some of those particular niches where we will be relying on their expertise.”
Deals not over
Rea said there was a ‘definite possibility of more deals’ this year.
Gallagher wanted acquisitions with a focus on a particular segment of the economy or market, that could bring something ‘special’ to the US broking giant.
He said: ”We do have a pipelines of deals we are looking at. We are keen to grow organically, and keen to grow through acquisition where it makes it sense.
”It’s about where we come across a management team that we like, were we have a shared set of values.”
Asked about financing for the deal, Rea said it was funded from free cashflow.
”We are very fortunate to have access to funds for deals. The leadership in the US is incredibly supportive of doing good deals on the retail side of the business.”
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