Arthur J. Gallagher & Co. Announces Closing of Public Offering of Common Stock

Rhea-AI Summary

Arthur J. Gallagher (NYSE: AJG) has completed its public offering of 30,357,143 shares of common stock at $280.00 per share. The company granted underwriters a 30-day option to purchase up to an additional 4,553,571 shares at the same price. Morgan Stanley & Co. led the offering as lead active book-running manager, with BofA Securities as active book-running manager. The offering was made through an automatically effective shelf registration statement on Form S-3. The company also announced the cancellation of its investor meeting previously scheduled for December 17th.

Positive

• Successfully completed large-scale public offering worth approximately $8.5 billion
• Strong institutional backing with multiple major investment banks as underwriters
• Additional potential proceeds from 30-day option for 4.55M shares if exercised

Negative

• Significant shareholder dilution from issuing 30.36M new shares
• Cancellation of scheduled investor meeting might indicate communication challenges

Insights

Financial Analyst

The successful completion of AJG's $8.5 billion stock offering significantly strengthens their capital position. The offering of 30.36 million shares at $280 per share, with an option for an additional 4.55 million shares, represents one of the largest insurance broker equity raises in recent history. The strong syndicate of investment banks suggests robust institutional interest. The timing aligns with AJG's strategic growth initiatives and potential M&A opportunities in the insurance brokerage space. While the offering will result in dilution of approximately 8.5% for existing shareholders, the additional capital provides substantial dry powder for future acquisitions and organic growth. The premium pricing relative to recent trading levels indicates strong market confidence in AJG's business model and growth trajectory.

Market Research Analyst

This significant capital raise positions AJG competitively in the consolidating insurance brokerage market. The successful placement at $280 per share demonstrates strong institutional appetite and market confidence in AJG's execution capabilities. The broad underwriting syndicate, led by top-tier firms Morgan Stanley and BofA Securities, suggests widespread distribution and robust demand. The cancellation of the investor meeting might indicate management's focus on immediate capital deployment opportunities. The size of the offering provides AJG with substantial financial flexibility to pursue strategic acquisitions and maintain its position as a leading consolidator in the fragmented insurance brokerage industry.

ROLLING MEADOWS, Ill., Dec. 11, 2024 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE: AJG) ("Gallagher") today announced the closing of its public offering of 30,357,143 shares of its common stock at a price to the public of $280.00 per share.  In connection with the public offering, Gallagher granted the underwriters a 30-day option to purchase up to an additional 4,553,571 shares of its common stock at the same public offering price.  Morgan Stanley & Co. LLC is acting as lead active book-running manager and BofA Securities, Inc. is acting as active book-running manager for the offering.  Evercore ISI, BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Dowling & Partners Securities, LLC, Jefferies LLC, Keefe, Bruyette & Woods, Inc., Piper Sandler & Co., Raymond James & Associates, Inc., RBC Capital Markets, LLC, TD Securities (USA) LLC, Truist Securities, Inc., UBS Securities LLC, Wells Fargo Securities, LLC, William Blair & Company, L.L.C., Nomura Securities International, Inc., and WR Securities, LLC are acting as co-managers for the offering.

The public offering was made pursuant to an automatically effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC") on December 9, 2024.  A final prospectus relating to the offering dated December 9, 2024 has been filed with the SEC and is available on the SEC's website at http://www.sec.gov.  Copies of the final prospectus relating to these securities may be obtained from (i) Morgan Stanley & Co. LLC, by mail at 180 Varick Street, 2nd Floor, New York, NY 10014, Attention: Prospectus Department; or (ii) BofA Securities, Inc., by mail at NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255, Attention: Prospectus Department, or by telephone at (800) 294-1322, or by email at dg.prospectus_requests@bofa.com.

In addition, Gallagher announced that the investor meeting with management, which was previously scheduled on Tuesday, December 17^th from 8:00 am until 12:00 pm, was canceled.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of the common stock or any other security of Gallagher, nor shall there be any sale of the common stock in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Arthur J. Gallagher & Co.

Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois.  Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.

Investors:  Ray Iardella	Media:  Paul Day
VP - Investor Relations	Communications Manager
(630) 285-3661/ ray_iardella@ajg.com	(630) 285-5946/ paul_day1@ajg.com

 

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SOURCE Arthur J. Gallagher & Co.

FAQ

How many shares did AJG offer in its December 2024 public offering?

AJG offered 30,357,143 shares of common stock in its December 2024 public offering, with an additional 30-day option for underwriters to purchase up to 4,553,571 shares.

What was the price per share for AJG's 2024 public offering?

The public offering price was set at $280.00 per share.

Who were the lead underwriters for AJG's 2024 stock offering?

Morgan Stanley & Co. acted as lead active book-running manager, while BofA Securities, Inc. served as active book-running manager for the offering.

What happened to AJG's scheduled December 17th investor meeting?

The investor meeting with management, originally scheduled for December 17th from 8:00 am until 12:00 pm, was canceled.

What is the total potential value of AJG's 2024 stock offering including the underwriter option?

If the underwriter option is fully exercised, the total offering would be approximately 34.91 million shares at $280.00 per share, potentially worth about $9.77 billion.