HRH Makes Major Chicago Acquisition

Insurance broker Hilb Rogal & Hobbs Company said it has signed an agreement to acquire Thilman & Filippini, L.L.C., a Chicago-based brokerage firm, increasing HRH revenues to over $700 million.

Terms of the deal were not released. Richmond, Va.-based HRH said it expects to complete the acquisition by Aug. 1, subject to regulatory requirements.

With 2005 gross revenues of approximately $24 million, Thilman & Filippini provides a wide range of property-casualty and employee benefits insurance products and services. The firm maintains specialized practice groups and programs for the health care, senior living and real estate sectors, as well as the energy, professional sports and cast metal industries.

HRH said Thilman & Filippini's more than 130 employees will continue to serve clients from its downtown Chicago office under the leadership of its existing partners, E. Thomas Thilman, Thomas W. Filippini, John M. Atkinson, Peter J. Kunz and Eric M. Mezmar, and the existing management.

Thilman & Filippini sales and service teams will remain intact and HRH said it anticipates no cuts in staff.

The operation will become part of HRH's Midwest region led by John P. “Jack” McGrath, HRH vice president and Midwest regional director.

HRH said the acquisition would make it one of Chicago's top four insurance brokerage firms.

With this acquisition, HRH said it will have acquired firms with more than $35 million in revenues so far this year. Based on the firm's 2005 fourth-quarter results, HRH would have total revenues of more than $719 million.

John Wepler, president of the independent agency consulting firm Marsh-Berry, based in Concord, Ohio, said HRH has managed to increase its market in Chicago significantly in just two years and has become a substantial presence there.

In this seller's market, HRH has become “a very desirable buyer” of brokerage firms because its resources allow for the opening of more markets to the seller, said Mr. Wepler.

He said HRH also has a reputation for flexibility in structuring deals to the seller's needs. He added that the firm has a good intuition about cultural fit, dropping out of the pursuit of an agency or brokerage if it is not comfortable with the target. They also embrace the strengths of their new partners and make them available throughout the organization.

Over the years, HRH has made a number of good-sized acquisitions, including the 2002 acquisition of Hobbs, which had annualized revenues of $240 million at that time.

Mr. Wepler said that as brokers grow larger, it is becoming important that they target larger acquisitions because with limited time and money, the integration of a single large firm keeps the acquiring broker from spreading itself thin with a bunch of smaller acquisitions.