Canadian Underwriter

Hub buys brokerage business from Safeco

March 17, 2004   by Canadian Underwriter

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Through an agreement with Satellite Acquisition Corp., Hub International is acquiring new Mexico-based Talbot Financial Corp. and its subsidiaries from Safeco Corp. in a deal valued at US$120 million.
Hub will invest in Satellite Acquisition, which is owned by the senior management of Talbot, resulting in Hub owning 70% of Talbot. The further 30% stake will be purchased by Hub over the next three years with Hub shares. Under current conditions, the charge to Hub’s earnings ,spread over three years, to purchase the additional 30% stake should be US$16 million, US$8 million and US$2 million respectively. However, Talbot management has the chance to increase the value of its stake if strong results are posted during that period.
The move allows Talbot’s management and staff to stay in place.
Hub expects the purchase to add US$100 million to annual revenue. “Talbot’s locations fit our plan to expand in the west and southwest regions of the United States,” says Hub chairman and CEO Martin P. Hughes.
Talbot specializes in traditional middle-market commercial lines, personal lines, employee benefits and life products, with the sale of annuities and other financial products accounting for about 10% of revenue.

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