Hub International Limited (NYSE: HBG and TSX: HBG) announced today that it has reached an agreement in principle to purchase the stock of Hooper, Hayes & Associates, Inc. (Hooper), a Los Angeles-based insurance brokerage firm founded in 1946.
Included in the purchase is Hooper's wholly-owned employee benefits affiliate, Brentwood Benefits & Consultants, Inc. The acquisition, which is expected to close in November, will be paid for with a combination of Hub stock and cash. Hooper, which will remain in Los Angeles, has 35 employees and generates approximately $5.3 million in annual revenues.
Hub plans for Hooper to assume management of Kaye-Western Insurance & Risk Services, Inc., Hub's existing retail brokerage unit, which will remain in Arcadia, California. Both offices will be directed by Frank C. Hayes, President and majority shareholder of Hooper. Mr. Hayes, who will report to Bruce D. Guthart, President of Hub's U.S. Operations, has been in the insurance industry 25 years. He is a graduate of the University of Minnesota - Winona and a member of the Risk and Insurance Management Society, Inc. (RIMS). Prior to his purchase of Hooper in 1992, Mr. Hayes worked for a large national insurance company as well as major national and regional brokerage firms.
In a joint statement announcing the agreement, Martin P. Hughes, Hub Chairman and Chief Executive Officer, and Mr. Guthart said the planned Hooper purchase and Hooper's assumption of the management of Kaye-Western is designed to create a southern California "hub" operation that could be expanded further by making local acquisitions within the region. Such acquisitions could then be folded into the hub. In recent months four other regional units of Hub, based in Michigan, Massachusetts, New York and Ontario, have completed acquisitions of local firms.
Commenting further, Messrs. Hughes and Guthart said, "Adding Hooper, Hayes to the Hub family ideally fits our growth strategy: it strengthens our impact in an important geographical region, adds a profitable book of business in both personal and commercial insurance and benefits coverages, including a strong medical malpractice liability specialty, and it gives us the services of an accomplished group of professionals led by Frank Hayes. It's an important step in our drive to become the go-to broker in North America for middle-market businesses that need expert insurance and risk management service."
Mr. Hayes said he was looking forward to joining the forces of his staff from Hooper and his new Hub colleagues to help grow the business. "Hub's business model is very promising in today's insurance climate." Mr. Hayes added. "Our regional focus enables us to offer our clients and prospects in southern California a wide range of products, services and professional capabilities that the smaller local insurance firms and the large national outfits are often unable to provide. With prices for insurance continuing to rise and some important coverages becoming increasingly difficult to obtain, a broker with Hub's depth of talent, array of resources and concentration on mid-size businesses is in a great position. It's exciting to be a part of that effort."
Hub International currently has nine large "hub" brokerages that have significant market presence in their geographic regions in the U.S. and Canada. Each hub provides insurance brokerage services and manages the various smaller Hub International brokerages in its territory. The hub brokerages are responsible for growth through sales, service and acquisitions, while the head office, located in Chicago, IL, coordinates access to the insurance market, expands the use of best practices among the hubs and manages the acquisition of additional hub operations.
A leading North American brokerage, Hub International has grown rapidly since its formation in 1998 through mergers, acquisitions and organic growth. It provides a broad array of property and casualty, life and health, employee benefits and investment and risk management products and services through offices located in the United States and Canada. Hub International's strategy is to expand its market share in the highly fragmented North American insurance broker industry by acquiring quality brokerages in key geographic regions serving middle-market commercial businesses, to leverage its decentralized approach in order to differentiate its services and to capitalize on its scale to provide broad product offerings to its clients through multiple distribution channels. Additional information on Hub International can be found at its website: www.hubinternational.com.
This press release may contain forward-looking statements which reflect our current views with respect to future events and financial performance. These forward-looking statements relate, among other things, to our plans and objectives for future operations. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to, risks associated with implementing our business strategies, identifying and consummating acquisitions, integrating acquired brokerages, attaining greater market share, developing and implementing effective information technology systems, recruiting and retaining qualified employees, fluctuations in the premiums charged by insurance companies with a corresponding fluctuation in our premium-based revenue, any loss of services of key executives, industry consolidation, increased competition in the industry, fluctuations in the demand for insurance products and the passage of new legislation subjecting our business to regulation in jurisdictions where we operate. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Additional information regarding these risks and other factors that could cause Hub International's actual results to differ materially from our expectations is contained in the company's filings with the Securities and Exchange Commission. Except as otherwise required by federal securities laws, Hub International undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.