NU Online News Service, May 13, 3:15 p.m.EDT

Arthur J. Gallagher pulled off a major acquisition in London,acquiring Heath Lambert Group Holdings, Ltd. for $158 million.

“This acquisition represents an important strategic move for ourcompany,” says J. Patrick Gallagher Jr., chairman, president andchief executive officer of AJG in a statement. “Since 1974, we'vebeen in London primarily as a wholesale broker. Now, Heath Lambertoffers us an excellent opportunity to become a large retail brokerin one of the best insurance markets in the world. Their highlyskilled team shares our culture and their complementary product andservice capabilities are an excellent fit with our U.S. andexpanding international retail operations.”

In a separate statement, Adrian Colosso, Heath Lambert's CEO,comments, “Heath Lambert complements AJG with a strong,well-respected and customer-focused retail operation that aims todeliver continued success focused on, primarily, UK-basedbusinesses and individuals.”

Established in 1877, Heath Lambert brokers nearly all lines ofproperty and casualty and employee benefit insurance productsthrough 1,200 professionals in 16 offices. Arthur J. GallagherInternational has 20 offices in 16 different countries around theworld. The combined group will employ more than 1,800 people.

AJG says the deal will expand its United Kingdom capabilities inthe areas of fine art specie, real estate, employee benefits, majorconstruction, entertainment, affinity relationships and publicsector businesses. It also expands the firm's benefits consultancyand advisory services.

The firm will also have increased access to “a wide range ofretail clients from large corporations and advisory services.”

AJG says that the transaction should generate approximately $158million in annualized revenue. Over a two-year integration periodthe firm expects Heath Lambert to break even financially in 2011and contribute about $20 million in 2012. That should rise to $33million by 2013 AJG says.

The net purchase price of $158 million was funded entirely withcash, according to AJG.

AJG International says that Colosso will continue to overseeretail operations in the UK, reporting to David Ross, CEO of ArthurJ. Gallagher International.

In an analyst's note, Meyer Shields with Stifel Nicolaus sayswith this acquisition AJG is one step closer to “becoming a globalbroker, diversifying the company away from the United States.”

A spokesperson for AJG says this transaction does not alter thefirm's strategy to focus on acquiring middle market agencies andbrokers.

Earlier this week, the Itasca, Ill.-based firm says it acquiredMeyers-Reynolds & Associates, Inc. headquartered in OklahomaCity, Okla.

Financial terms of the transaction were not released.

Formed in 1985, Meyers-Reynolds & Associates is a retailinsurance broker providing commercial property and casualtyinsurance products and risk management services to their clientsworldwide. They specialize in insurance programs for the utilityand power generation and energy industries.