U.S.I. Completes Summit Global Purchase

The Briarcliff Manor, N.Y.-based broker said closing of the acquisition is expected at the beginning of next month. U.S.I. announced its intent to purchase SGP in September of 2004.

Established in 1996, SGP specializes in risk management and employee benefits for middle market companies throughout the U.S. with offices in Texas, Florida, Illinois, California, Tennessee, New Mexico and Michigan. SGP is expected to contribute approximately $66 million of revenues to U.S.I. on an annual basis.

U.S.I. said it has received a waiver from its lender group, in conjunction with the transaction, and commitments for another $80 million in borrowings on its existing term loan. The $80 million will be used to repay notes that will be issued in connection with the acquisition, to pay down borrowings on U.S.I.'s revolving credit facility, and for general corporate purposes.

Last year, among its acquisitions, U.S.I. purchased Los Angeles-based Dodge, Warren Peters, a firm that is expected to produce $25 million in revenue.

Last month, U.S.I. issued lower earnings guidance for 2004, saying it expected earnings to come in at between 96 cents and 98 cents a share, down from $1.02 to $1.07 a share it announced earlier in the year. The company also announced the layoff of one percent of its workforce of 2,500 employees. It also planned to sell off three poorly performing operations.

The company attributed its difficulties to the combination of a softening market and overconfidence in the company's ability to attract new business.