BB&T has agreed to buy a wholesale insurance company in a move that should increase the Winston-Salem, N.C., company's annual insurance revenue by 15%.
The $210 billion-asset BB&T said in a press release Wednesday that it will pay $500 million in cash for CGSC North America Holdings Corp., which operates as Swett & Crawford. The deal is expected to close by June 30.
Cooper Gay Swett & Crawford Ltd., a U.K. reinsurance brokerage firm, reportedly had been planning to sell Swett & Crawford since November.
BB&T said the purchase should add more than $200 million in annual revenue. The company said it expects to record about $500 million of goodwill and intangibles as a result of this acquisition. The deal excludes Swett & Crawford's business outside the United States.
The acquisition "nicely enhances our insurance business and increases and diversifies our overall fee income profile," Kelly King, BB&T's chairman and chief executive, said in the release. "With its long history and broad offerings, Swett & Crawford is a great strategic fit for BB&T."
BB&T said the capital used to buy Swett & Crawford represents a reallocation of the rest of the company's approved share repurchases under last year's Comprehensive Capital Analysis and Review.
King recently said BB&T would take a break from buying banks as it focuses on integrating recent acquisitions. At the time, he said it might make more sense to buy back stock, given sharp declines in stock prices across the banking industry. King also said in a recent interview that it could make sense for banks to use more cash, as opposed to stock, for acquisitions.
Deutsche Bank Securities and Willkie Farr & Gallagher advised BB&T.