Hub International Limited (NYSE:HBG)(TSX:HBG) today announced that it has signed a proposal to purchase substantially all of the brokerage operation assets, primarily insurance relationships with customers and insurers, of Near North National Group (Near North). The proposal to purchase has been approved by the Board of Directors of Near North.
Terms of the transaction will be disclosed upon execution of a definitive agreement. Hub did indicate that it is an arrangement in which all of the total purchase price (except certain assumed liabilities) will be paid on the basis of future revenues from the acquired assets. Completion of the transaction is subject to further due diligence, negotiation and execution of a definitive agreement and customary regulatory approvals and conditions.
Near North operations include property and casualty insurance brokerage, employee benefits and life insurance consulting, structured settlement services and facultative reinsurance intermediary operations primarily located in Chicago, Los Angeles, New York, Las Vegas, Arlington, Virginia and Dallas.
"We are pleased to announce the proposal to purchase the insurance brokerage operations of Near North, a premier brokerage organization," said Martin P. Hughes, Hub Chairman and Chief Executive Officer. "The acquisition of Near North would add numerous specialty lines of business to our operations serving a vast number of industries and add to our employee base with the services of an accomplished group of professionals who strive to provide their clients with high-quality, responsive brokerage services.
"We are working diligently with Near North's senior officers to complete the due diligence process and conclude the transaction in a timely manner," commented Mr. Hughes. Hub indicated that due diligence would include discussion with appropriate regulatory organizations and other government entities.
Hub will be discussing the asset purchase of Near North and its second quarter earnings results and updated guidance on a conference call scheduled for 10:30 a.m. (EDT) on Thursday, July 31, 2003.
Headquartered in Chicago, IL, Hub International is a leading North American insurance brokerage that has grown rapidly since its formation in 1998 through mergers, acquisitions and organic growth. Hub International provides a broad array of property and casualty, life and health, employee benefits, 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 U.S. insurance brokerage industry by acquiring quality firms that focus on servicing middle-market commercial businesses. In addition, Hub plans to leverage its decentralized approach, differentiate its service, and capitalize on its scale to provide broader product offerings to its clients through multiple distribution channels. Hub International currently has eleven 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 other Hub International offices in its territory. The hub brokerages are responsible for growth through sales, service and fold-in acquisitions. The hub offices report to the head office which, in addition to monitoring the activity of each hub, retains responsibility for identifying and acquiring additional hub brokerages, along with integration and coordination initiatives that increase enterprise value.
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 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 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.