Willis Group doubles North American revenue with brokerage acquisition

Willis Group Holdings Limited has acquired the United States’ eighth-largest insurance brokerage firm, Hilb Rogal & Hobbs Company (HRH), for a total of US$2.1 billion, effectively doubling Willis’ North America revenues. The transaction is expected to close in 2008 Q4. It is subject to customary closing conditions, such as regulatory and HRH shareholder approval, according to a Willis press release. The total purchase prices US$2.1 billion represents a multiple of 2.4 times estimated 2008 HRH revenues, as well as less than 10 times estimated 2008 earnings before interest expense, income taxes, depreciation and amortization (EBITDA) including the assumption of an estimated US$400 million of HRH debt, the release notes. Annualized synergies are expected to amount to roughly US$140 million by 2012, the release continues. “This dynamic transaction is all about growth,” Joe Plumeri, chairman and CEO of Willis, said in the release. “It’s truly transformational for our North America business. Only HRH has the scale and fit in attractive growth areas to take our business to the next level.”HRH’s complementary strengths and geographic footprint will help us accelerate the performance momentum we’ve achieved through our Shaping our Future strategy.”The new organization in North America will be renamed Willis HRH upon completion of the transaction.