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Broking powerhouse Gallagher is on the hunt for more UK regional businesses following its swoop this week for Risk Services – it’s first acquisition in the UK broking market in four years – it has revealed.
Michael Rea, CEO of Gallagher’s UK retail arm, told Insurance Business that the firm is “ready to start buying again” and that cash would be invested in UK players.
“What we are looking to do is find like-minded, regional brokers that are commercially-focused, where we like the management team and there’s a nice cultural fit, and we will add those into our branch network,” the CEO said.
Rea described the purchase of Risk Services, revealed this week, as a “really good template” for other regional deals that Gallagher is planning to carry out across the country throughout the rest of 2018 and into 2019 and beyond.
“That’s part of how we are going to grow our business – through acquisition in addition to the organic growth that we’re enjoying at the minute,” he said.
With 50 offices in its UK retail branch network already, the firm is “reasonably agonistic” as to the location of potential targets, but areas where there is an existing branch network are likely to be top of the list.
“We’re looking to acquire where we can buddy up new businesses to existing branches. There’s no particular geographical bias to our strategy, it’s more quality rather than geography we are looking for,” Rea said.
“Fundamentally, once you get past the numbers and the financials of the transaction, we’re really looking for people who are a good fit, and you can only ascertain that by spending time with the sellers of the business, trying to get to know them, and trying to work out where they will fit in the organisation that we have built here in the UK,” he went on to say.
“I think we offer a fantastic home and a great story. We are a community broker, but we’re part of a global player – with that brings access to products and markets which they would probably otherwise not be able to access as a regional broker - but there is also a family feel which is incredibly important to us.”
While the business is currently enjoying organic growth, Rea admits that the landscape is a challenging one – particularly in the mid-market and SME space.
“If you can grow ahead of the economy, then you are beating the market,” he said. “It is a tough trading environment, and it’s tough for our clients, so it’s ever more important that we stay close to our clients, we listen to their needs, and we provide solutions that work for them.”
