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Insurance Brokerage Raising $160M, Acquisitions in Works

“There are times when we identify competitors or other brokerage properties that very much fit within our strength of specialization. Oftentimes, we seek to acquire them.” —Greg Zimmer, Alliant

The county’s largest insurance brokerage is raising $160 million to fund two acquisitions designed to boost its business in California and on the East Coast.

Newport Beach’s Alliant Insurance Services Inc. is selling debt to help fund the purchase of the brokerages in deals that are set to close soon, according to Greg Zimmer, president and chief financial officer of Alliant.

The company’s acquisition targets weren’t disclosed.

“The combined revenue of the two firms will be about $75 million” a year, Zimmer said. “It’s sizeable.”

Alliant plans to acquire the brokerages using cash from its debt sale and its own shares.

The company arranges insurance packages for companies, often by bundling them together for discounts.

Alliant may bundle, say, 100 law firms to find the best rate and terms for them as a group.

The brokerage also works with hospitals, governments, school districts, oil and gas companies, Indian tribes and real estate companies, among others.

Alliant is the largest brokerage operating in the county.

Company Data

On the Business Journal’s October list, Alliant ranked No. 1 among insurance brokerages here with $77 million in revenue generated locally.

The company employs 155 people in the county.

Alliant is the 11th largest insurance brokerage in the country, with projected 2010 nationwide revenue of $360 million.

The company employs 1,143 people across the country at 44 offices in 22 states.

The acquisitions stand to be Alliant’s first sizeable deals since 2008, when it acquired Seattle’s ClearPoint, a company that ran one of the largest employee benefits businesses in Washington state.

In 2006, Alliant paid $100 million for the U.S. businesses of Britain’s Jardine Lloyd Thompson Group PLC.

The company made two smaller purchases this year, buying J.D. Tanner & Associates, a Dallas area agency that specializes in the trucking industry, and Almond Valley Insurance Services Inc., a regional employee benefits brokerage in Chico.

The pending East Coast acquisition, the bigger of the two planned deals, is designed to help Alliant grow its business in the region, Zimmer said.

“There are times when we identify competitors or other brokerage properties that very much fit within our strength of specialization,” he said. “Oftentimes we seek to acquire them.”

Primary Business

Alliant’s two primary businesses are arranging property and casualty insurance and employee benefits such as healthcare insurance.

Healthcare has been one of Alliant’s fastest growing businesses in the past year, according to Mark Conway, a senior executive vice president and managing director in Alliant’s Newport Beach office.

“This trend has enabled us to grow during challenging economic times and positions us for future growth,” Conway said in an October interview.

Alliant has 17 licensed property and casualty brokers here, down two from a year earlier. It has five benefits brokers, flat from a year earlier.

The company was founded in 1927 as Robert F. Driver Co. in downtown San Diego.

In 1977, Thomas Corbett, Alliant’s chairman and chief executive, was hired as a broker and started what would become the company’s Newport Beach headquarters with Ted Davidson.

Robert F. Driver Co. was acquired in 2001 by Connecticut’s Alliant Resources Group, which raised money from investors to acquire and combine brokerages.

In 2005, New York-based private equity firm Lindsay Goldberg & Bessemer acquired Alliant, which soon after changed its name to Alliant Insurance Services.

In 2007, Alliant was acquired by New York-based private equity firm Blackstone Group LP in a deal estimated at $1.2 billion.

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