BB&T Completes $300 Mil.-Plus McGriff Deal
By Mark E. Ruquet
NU Online News Service, Feb. 2, 2:39 p.m. EST?BB&T Insurance Services said it has completed its acquisition of McGriff, Seibels & Williams Inc. brokerage of Birmingham, Ala., for $350 million in cash and stock.
BB&T, a subsidiary of Winston-Salem, N.C.-based BB&T Corp., a banking and financial services company, said the deal is valued at $300 million in stock (based on an average closing price of $36.47 during a five-day pricing period prior to Sunday) plus $50 million in cash.
The transaction also involves a total earn-out payment to McGriff shareholders of approximately $102 million in cash over a five-year period if the firm exceeds certain performance targets, BB&T said.
With more than 775 employees, McGriff will operate as a wholly owned subsidiary of BB&T. It will retain its name and management team.
BB&T said McGriff, founded in 1886, was the largest privately held commercial insurance broker headquartered in the Southeast.
McGriff has offices in Atlanta, Dallas, Houston, and Birmingham, Ala. The firm specializes in large commercial and energy accounts, and Fortune 500 companies. Its risk management specialty areas include energy and marine, financial services, commercial, construction, surety, employee benefits, health care and public entity, according to BB&T.
Wade Reece, president of BB&T Insurance Services, told National Underwriter that the acquisition breaks new ground for BB&T. In the past the retail unit has concentrated the delivery of its services within the same footprint as its parent company. This acquisition follows a growth strategy that would allow expansion into larger commercial accounts across a broader geographic area. It also allows for greater cross-selling opportunities with its wholesale unit CRC.
"We have known each other for years and this is a good cultural fit and mix," said Mr. Reece of the acquisition, adding that McGriff helps point BB&T growth strategy in a direction it plans to continue.
David Spring, senior director with Fitch Ratings based in New York, said that while the acquisition is a departure for BB&T in terms of size, and adds another platform of insurance services, it does fit in with the corporation's strategy of growth that it has pursued since the mid-1990s.
Raleigh-based BB&T Insurance Services operates 72 agencies in North Carolina, Virginia, Georgia, South Carolina, Maryland, West Virginia, Tennessee, Florida, Kentucky and Alabama.
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