HUB International Limited (NYSE: HBG) (TSX: HBG) announced today that it has agreed to acquire substantially all of the assets of one of the largest Louisiana-based insurance brokers, Hibernia Insurance Agency, L.L.C. Hibernia Insurance, an $18 million revenue brokerage firm, will become a new regional platform (HUB) doing business as HUB International Gulf South (HUB Gulf South).
Based in Metairie, Louisiana, Hibernia Insurance employs 85 people at offices in Metairie, Lafayette and Baton Rouge. It serves clients throughout the Southeast and beyond the state of Louisiana including Alabama, Mississippi, Arkansas and Texas. Steve Terry, president of Hibernia Insurance, will become president of HUB Gulf South.
"The Hibernia Insurance Agency acquisition is a major step in our strategy to increase penetration of the southern United States," said Martin P. Hughes, HUB International's chairman and chief executive officer. HUB International acquired Fortun Insurance in Florida last summer and has indicated its desire to expand in the Southeast and along the Gulf Coast.
"Hibernia Insurance brings more than 40 years of solid client service and a high quality reputation to HUB," Hughes added. "The company's mix of commercial property and casualty and employee benefits is a good complement to HUB's existing product lines. In addition, Hibernia Insurance offers clients specialized expertise in placement of non-standard marine, energy and property risks."
Founded in 1965 as the Rosenthal Agency, Inc., the brokerage was purchased in 2000 by Hibernia Agency, L.L.C., now a subsidiary of Capital One Financial Corporation (NYSE: COF). This acquisition marks the third major purchase by HUB International of a large brokerage operation from a major bank. HUB previously acquired brokerage businesses from Fifth Third, in late 2002, and Citizens Financial Group, in 2006.
"We are pleased that major banks recognize HUB as the company that will deliver a high level of quality and dedication to their brokerage customers, including clients that also are banking customers," Hughes said. "We know the degree of trust required to transfer valued clients to another firm, and we are committed to maintaining that trust every day."
Closing of the acquisition, which is structured as an asset purchase, is expected to occur during the first quarter of 2007 and is subject to the satisfaction of customary closing conditions. HUB intends to offer employment to all active employees in good standing on the closing date. Financial terms of the acquisition were not disclosed.
Headquartered in Chicago, IL, HUB International Limited is a leading North American insurance brokerage that provides a broad array of property and casualty, reinsurance, life and health, employee benefits, investment and risk management products and services through offices located in the United States and Canada.
This press release may contain forward-looking statements that 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 and 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 corresponding fluctuations 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, exchange rates, resolution of regulatory issues, including those related to compensation arrangements with insurance companies, the actual costs of resolution of contingent liabilities 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 and the Canadian securities commissions. 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.