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Brown & Brown, Inc. Enters Into Agreement to Acquire Beecher Carlson Holdings, Inc. for $336.5M

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Posted on 22 May 2013 by Neilson

Brown & Brown acquisition of Beecher CarlsonJ. Powell Brown, Chief Executive Officer and President of Brown & Brown, Inc, today announced that Brown & Brown, Inc. has entered into a merger agreement to acquire Beecher Carlson Holdings, Inc. ("Beecher Carlson"), an insurance and risk management broker with operations that include retail brokerage, program management and captive management, from Austin Ventures, FSPM and a group of individual employee and non-employee equityholders. 

The transaction is expected to close in July of 2013 and is subject to customary closing conditions, including regulatory approval. The transaction will be a cash acquisition and is not subject to financing conditions.

Beecher Carlson Holdings, Inc., through its subsidiaries, had total annual net revenues for 2012 of $105.6 million. 

As part of this transaction:

  • Steve Denton, Beecher Carlson's current President, will be named a Regional Vice President of Brown & Brown, Inc. and will serve as the CEO of Beecher Carlson. 
  • Dan Donovan, Beecher Carlson's current Chief Executive Officer, will serve as Executive Chairman of Beecher Carlson.
  • Messrs. Denton and Donovan will both be actively involved in the day-to-day operations of Beecher Carlson and will also join Brown & Brown, Inc.'s Leadership Council.

The large account division will remain intact, operating as Beecher Carlson under its current leadership based in Atlanta, Georgia. The middle-market retail offices in Oregon, Arizona and Mississippi will become part of the existing Brown & Brown Retail Division. The OnPoint programs will become a part of Brown & Brown's National Programs Division.

Powell Brown stated, "This transaction brings many exciting opportunities to Brown & Brown. Beecher Carlson enjoys an enviable position in the industry segments in which it operates, especially in the large account space. We are bringing together great people and a shared customer service and sales culture. The addition of Beecher Carlson to the Brown & Brown team offers us an expanded footprint, new opportunities, enhanced resources and a strong leadership team to facilitate a seamless transition into Brown & Brown." 

Dan Donovan stated, "This combination with Brown & Brown is very positive for our clients and employees and we look forward to continuing to build out the Beecher Carlson large account platform. Further, I have been working closely with Steve Denton and the entire Beecher Carlson leadership team and know Steve is the right person to lead the large account group to new heights as part of Brown & Brown."

Steve Denton said, "Brown & Brown is well known as one of the best run operations in the insurance distribution field. With our expertise in the large corporate arena, we represent a focused channel for growth for Brown & Brown. I also want to congratulate Dan Donovan, our leaders, and our dedicated employees for building the foundation of passionate client service, innovative products and services, and accountability around operational excellence. This foundation will serve us well as we invest and grow our brand as part of the Brown & Brown enterprise."

The total net consideration is $336.5 million ($360 million in cash with adjustments for working capital and the value of net tax operating loss carryforwards).



Jeffrey Neilson  May 21 2013 8:54PM Report Abuse
The truth is most agency sales today are tied to an earn out in which a large amount of the purchase consideration isn't paid for multiple years after the sale closes, the actual selling price is typically not transparent @ closing.
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