Hub International Limited (NYSE:HBG)(TSX:HBG):
- 745,765 shares to be distributed to approximately 70 Talbot employees
- Total three-year earnout expected at $56 million
Hub International Limited (NYSE:HBG)(TSX:HBG) reported today that the company will issue an aggregate of 745,765 common shares to approximately 70 employees of the acquired Talbot insurance brokerages in the second of three earnout payments related to the July 2004 acquisition.
"We are gratified by the strong financial performance and customer service delivered by our colleagues at Talbot since they joined us in 2004," said Martin P. Hughes, chairman and chief executive officer of Hub International. "They have earned these payments through dedication and improved financial returns that exceeded our initial projections."
The common shares fulfill an earnout payment obligation of $19,024,444 according to the company. The company has the option to make earnout payments in either cash, common shares or a combination of both. Hub's first earnout payment in September 2005 was implemented through distribution of $16.4 million in cash. The third and final earnout payment is scheduled for March 2007. Hub has indicated that the total of earnout payments--based on profitability of Talbot operations--is likely to be approximately $56 million.
The company has expressed a preference for common shares as a payment vehicle for the third and final earnout payment, although a decision will be made based on circumstances at that time. The earnout payments will be recorded as compensation expense whether payment is made in cash or common shares. This compensation expense, which is not deductible for tax purposes, will be charged to earnings through the first quarter of 2007 and will affect earnings comparisons through 2007.
Headquartered in Chicago, IL, Hub International Limited is a leading North American insurance brokerage that 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.
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.