U.S.I. To Purchase Summit Global Partners

By Mark E. Ruquet

NU Online News Service, Sept. 9, 1:08 p.m. EDT?U.S.I. Holdings Corporation said it has reached an agreement in principle to purchase Summit Global Partners (SGP), based in Dallas.[@@]

An e-mailed announcement that said "U.S.I. Holdings Corp announces $70 million deal" included a press release stating terms of the transaction were not disclosed. U.S.I. said SGP is expected to contribute approximately $68 million in revenues to U.S.I. on an annual basis.

The acquisition, which is expected to be completed in the fourth quarter of this year, is still subject to negotiation and execution of definitive agreements, regulatory approvals and other customary closing conditions, the Briarcliff Manor, N.Y.-based U.S.I. said.

In 2003, SGP reported annual revenue of nearly $68 million. Established in 1996, the firm specializes in risk management and employee benefits for middle-market companies throughout the U.S. In addition to Texas, the firm has offices in Florida, Illinois, California, Tennessee, New Mexico, Michigan, and Oklahoma.

In a conference call, David L. Eslick, U.S.I.'s chairman, president and chief executive officer, said the two parties began talking over 90 days ago about the possibility of acquisition. The firm, he added, was not up for sale.

"We see this as a very important stepping stone for the company and it fits right within our strategic focus," he said.

Executives said the deal would involve a combination of 35 percent cash, 25 percent stock and 40 percent notes. It would have little impact on U.S.I.'s earnings for 2004, they added. The price of the purchase was not disclosed during the conference.

SGP's business fits in with U.S.I.'s current business footprint, and if completed, would make U.S.I. the leading broker in Texas with over $60 million in combined revenue and in Florida with $45 million in combined revenue, two key areas for growth and expansion opportunities for the firm, said Mr. Eslick.

Edward J. Bowler, senior vice president for corporate development, noted that the deal offers enormous opportunities for cross selling insurance and employees benefit business. He predicted that with similar sales cultures, there should be easy integration of the two.

SGP has more than 6,000 commercial clients, largely middle-market accounts, handled by 71 producers, executives said.

Executives noted that the deal would "add scale" to U.S.I.'s California and Florida operations where the firm has done no acquisitions since its IPO in 2002.

Mr. Eslick said the firm expects to complete one or two more acquisitions by the end of the year, but not on the scale of SGP.

U.S.I. reported more than $350 million in revenue in 2003.

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U.S.I. To Purchase Summit Global Partners

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