Hub International Limited has completed it's acquisition of Personal Lines Insurance Brokerage Inc. (PLI) from Warren, N.J.-based insurance carrier The Chubb Corporation.
Terms were not released. However, when Hub announced the acquisition Aug. 1, the Chicago-based broker said valuation of the deal was within its range for acquisitions, which is five-to-seven times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
In 2004, PLI generated $27 million in revenue, Hub said. Hub's own personal lines revenue totaled $25 million in the U.S. and $70 million on a consolidated basis, including Canada.
The broker said the acquisition would expand Hub's position in personal lines insurance across most of the U.S. The business will be renamed Hub International Personal Insurance. It will be promoted as a specialty practice, both on a stand-alone basis and to supplement other Hub products and services.
Hub said it would begin to run advertising this month to brand the business and focus on the highly affluent audience. This would be the introduction of the Hub name to areas in Dallas and sections of Florida, a representative said.
"We welcome a very talented team of employees and an attractive base of clients to Hub with this acquisition," said Martin P. Hughes, chairman and chief executive officer of Hub International. "As we integrate PLI operations within our regional hubs, we anticipate more choices for clients, new growth opportunities and significant operating efficiencies."
Mr. Hughes noted that Hub and PLI offices share overlapping operations in regions where PLI currently derives approximately 53 percent of its revenue, leading to consolidation and other cost-saving opportunities. There are 220 employees at PLI.
Hub named PLI leaders Jim Kane, president, and Kathleen Zortman, chief operating officer, for Hub International Personal Insurance in the U.S.
Their leadership roles will include working with all personal insurance specialists at Hub's regional offices. Mr. Kane will join Hub's executive committee.
Hub added it has established a performance and retention incentive program for PLI employees. Under the program, PLI employees who remain with Hub for five years would receive approximately 134,000 restricted share units. Each share can be converted into a share of Hub common stock on the fifth anniversary date of the acquisition, subject to the attainment of certain revenue and profitability goals.
Founded in 1982, Hub said PLI serves approximately 44,000 high net worth clients. It offers coverage options from more than 100 insurance carriers. PLI's staff is currently based in 18 offices and is licensed to handle insurance in all 50 states.
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