It's official: Gallagher snaps up Giles for £233m

Arthur J Gallagher has signed an agreement to buy Giles for £233m in cash.

The addition of Giles’s 1,100 employees and 43 offices swells Gallagher’s UK presence to 70 offices and 3,100 staff.

The deal significantly expands Gallagher’s position in the UK mid-market – there is little overlap between the two companies’ current locations.

Gallagher also expects the group to benefit from cross-selling opportunities and expanding niche practice groups.

Broker networks

The deal includes broker networks Westinsure and Compass Broker Services, which have 200 members between them.

Giles will contribute £90m of revenue a year and £35m of profit a year after 2015. These estimates exclude integration costs, which will range between £1.5m to £2.5m per quarter until early 2015, Gallagher said.

Of the revenue estimate, £57m will come from Giles’s retail commercial lines broking division and networks, £10m from its managing general agency Ink Underwriting, £5m from personal lines and £5m from its wholesale business, which includes Lloyd’s broker FSJ Broking.

The transaction is subject to regulatory approval and is expected to be completed next month.

Gallagher strategy

“We continue to look for outstanding international partners that have a similar growth strategy and operating structure, and this is what we found in Giles,” said chairman, president and chief executive J Patrick Gallagher Jr. 

Together, we can significantly expand our operations in England and Scotland”

“Giles has a team-based sales culture that matches ours. With our combined resources, we will be able to offer new and current clients additional and/or expanded sales and service capabilities.

“Together, we can significantly expand our operations in England and Scotland, as well as add operating platforms in Northern Ireland, Wales, the Isle of Man and the Channel Islands.”

Giles chief executive Brendan McManus will join the AJG international executive committee, led by UK chief executive David Ross (pictured).

He said: “Our team has been really impressed by the Arthur J Gallagher culture and the level of engagement between the senior teams. It’s a great opportunity to combine two high-performing businesses and deliver an even better proposition to our clients.”