Insurance brokerage firm, Brown & Brown has entered into an agreement with Davies Group Ltd., that includes the sale of four third-party administrator (TPA) businesses and a long-term strategic commercial relationship.
The transaction is expected to close in December of 2023, and is subject to certain closing conditions.
The announcement was made by J. Scott Penny, Chief Acquisitions Officer of Brown & Brown.
According to the announcement, the four claims and services businesses that are set to be acquired by Davies include American Claims Management (ACM) a TPA, Preferred Governmental Claims Services, USIS, a supplier of managed care services and TPA for workers’ compensation and liability claims, and ICA, a premier independent property adjusting firm, collectively known as the TPA Operations.
Moreover, all 600 teammates in the TPA Operations will also be transitioning to the Davies team as part of this transaction and will continue to serve both their customers and carrier partners as they do today as part of Brown & Brown.
In addition, the acquired businesses represent approximately $100 million of annual revenue. The transaction is also expected to generate purchase proceeds in the range from $185 million to $205 million.
Brown & Brown is also said to be establishing a long-term commercial relationship with Davies to leverage their claims services capabilities to enhance the company’s core brokerage and programs operations.
Chris Walker, president of the National Programs segment, commented: “Brown & Brown has had a working relationship with the Davies organization for many years. As they began to look at expanding their presence in the United States, there was a natural opportunity to engage our team. Through our discussions, we determined that we had an opportunity to enhance both of our organizations through a strategic transaction. Davies is best positioned to invest the necessary resources to grow these TPA businesses, from technology enhancement to training and development opportunities for teammates.”
Dan Saulter, group CEO of Davies, said: “We are thrilled to sign this deal with Brown & Brown and are excited about the 600 incredibly talented colleagues that will be joining the Davies Group. This transaction enables us to invest and grow ACM, PGCS, USIS and ICA while building a strategic relationship with Brown & Brown to support their business with claims and more comprehensive solutions as they continue to grow their business.”
