Associated to sell insurance business for $265 million
Associated Banc-Corp in Green Bay, Wis., has agreed to sell Associated Benefits & Risk Consulting to USI Insurance Services.
The $34 billion-asset Associated said in a press release Monday that it will sell the insurance agency and consulting firm to USI for $265.8 million in cash. The final price is subject to adjustment for transaction expenses and working capital changes, among other things.
The unit, known as ABRC, has 400 employees. Its pro forma revenue over the last 12 months was $89 million.
"This transaction allows us to monetize our investment in ABRC and further our strategic goals of enhancing shareholder value and being a source of strength for our customers, colleagues and communities," Philip Flynn, Associated’s president and CEO, said in the release.
"The meaningful valuation difference between regional banks and insurance brokers is not reflected in Associated's share price, and that difference will also make it difficult for ABRC to grow through acquisitions,” Flynn added. “The capital provided from this transaction will support loan growth, create an added buffer during these trying economic times and support our dividend policy."
The deal is expected to close in the second or third quarter.
Goldman Sachs and Husch Blackwell advised Associated.