NU Online News Service, Sept. 30, 1:09 p.m. EDT
Arthur J. Gallagher & Co. said its subsidiary, Gallagher Bassett Services, Inc., has signed an agreement to acquire the third-party administrator (TPA) assets and managed care service operations of GAB Robins North America, Inc. and its subsidiary MedInsights, Inc.
Financial terms of the transaction were not disclosed.
The deal, announced late yesterday, is expected to close in October.
AJG, based in Itasca, Ill., said it expects the transaction to generate approximately $45 million to $50 million in annualized revenue. Over 420 GABR professionals will combine with Gallagher Bassett's property and casualty TPA and managed care operations and will operate under the direction of Gallagher Bassett's President, Scott R. Hudson.
AJG said GAB Robbins provides third-party claims and risk management services primarily for workers' compensation, general liability and commercial auto insurance segments to more than 200 self-insured commercial customers throughout the U.S. across a wide variety of industries including many Fortune 1000 companies. Its managed care provider offers case management and cost-containment services, including medical bill review, nurse case management and pharmacy benefit management for self-insured workers' compensation cases.
The deal does not involve GAB Robins' North American loss adjusting services business that focuses on p&c loss adjusting services.
Harry Baumgartner, a spokesman for GAB Robins, said the company has more than 100 years experience in its core strength in loss adjusting services. The TPA business was begun 20 years ago. Loss adjusting services has always remained the larger segment of the company and it will continue as an ongoing concern.
"Our loss adjusting business remains strong, and the sale of our TPA and managed care businesses will have no effect on the superior service our customers have come to expect," said Jim Girard, chief executive officer of GAB Robins' LAS Division in a statement.
In a separate statement, J. Patrick Gallagher, Jr. chairman, president and CEO of AJG said, "The strategic combination of these two great organizations underscores our commitment to invest in and grow this business."
Mr. Hudson said, "Combining our teams will enable us to expand our customer base and add talented staff to our highly-experienced group of professionals. GAB [Robins] fits well within our business culture, and together we will continue to strengthen our position as the best TPA provider in the property and casualty space."
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