GALLAGHER ARTHUR J & CO FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits - Insurance News | InsuranceNewsNet

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August 13, 2013 Newswires
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GALLAGHER ARTHUR J & CO FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits

Edgar Online, Inc.

Item 1.01 Entry into a Material Definitive Agreement.

On August 12, 2013, Arthur J. Gallagher & Co. (the "Company") acquired Bollinger, Inc. ("Bollinger"), a retail property and casualty insurance broker, wholesale broker and program manager, and employee benefits broker and consultant. Bollinger has approximately 500 employees and operates out of eight offices throughout New Jersey, New York, Pennsylvania and Connecticut.

The acquisition was effected pursuant to an Agreement and Plan of Reorganization (the "Agreement"), by and among the Company, JPGAC, LLC, a Delaware limited liability company ("Merger Sub"), Bollinger, Bollinger Holdings, Inc., a Delaware corporation ("Holdings"), Evercore Capital Partners II L.P., a Delaware limited partnership, and Management Group, LLC, a Delaware limited liability company. Upon entering into the Agreement, Holdings merged with and into Merger Sub, with Merger Sub being the surviving entity (the "Surviving Company") and continuing as a wholly-owned subsidiary of the Company (the "Merger").

As a result of the Merger, all outstanding shares of Holdings common stock, par value $0.01 per share ("Holdings Common Stock") were canceled and all the rights and obligations of Holdings vest in the Surviving Company. Pursuant to the terms of the Agreement, the Company paid a total of approximately $172 million in cash, which was used to repay Holdings' outstanding indebtedness, pay certain transaction expenses, with the remaining $16.56 million, after the deduction of the escrow holdback as described below, being paid to holders of Holdings common stock. The Company also issued to the holders of Holdings common stock $140 million, or 3,177,486 shares, of its common stock, par value $1.00 per share (collectively, the "Merger Consideration"). The Company paid the cash portion of the Merger Consideration using cash from operations and borrowings under its credit agreement. In addition, there will be a customary post-closing working capital adjustment to the Merger Consideration.

The Agreement contains customary warranties with respect to matters such as operation of the acquired business, regulatory compliance, litigation and taxes, as well as customary covenants with respect to indemnification of certain identified liabilities, insurance, litigation support and employee benefits. The Company held back $22 million of the Merger Consideration and placed it in escrow as partial security of these indemnification obligations.

A copy of the Agreement will be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.

Item 8.01 Other Events.

On August 12, 2013, the Company issued a press release announcing entry into the Agreement. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

    (d) Exhibits.                       Exhibit                     No.     Description                    99.1      Press Release, dated August 12, 2013

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