Gallagher & Co. acquires Springfield insurance firm

After six months negotiating, Itasca, Ill.-based Arthur J. Gallagher & Co. (NYSE: AJG) acquired 16-year Springfield insurance consultant Jenkins & Associates in late December. Terms of the transaction were not disclosed.

Started by Douglas Jenkins in 1997 out of his home, Jenkins & Associates offers employee benefit brokerage and consulting services for some 250 clients in Missouri and Arkansas, Jenkins said. Specializing in public school consortiums and group plans, Jenkins advised on key Missouri legislation that authorized consortium insurance plans seven years ago, and the firm developed the state’s first private sector consortium for the Missouri Association of Manufacturers.

“(Gallagher & Co.) came to me and said, ‘We want to expand with good companies, and we like what you’ve done with the consortiums,’” Jenkins said, noting he’s received other purchase offers during the years, but he pulled the trigger with Gallagher & Co.’s reputation, especially in property and casualty lines, and a rule change in the Affordable Care Act affecting his clients.

Jenkins said employers with fewer than 50 employees can no longer participate in consortiums.

“I’m working with the state legislature to pass a law to allow them to continue to participate in the consortiums,” he said, noting southwest Missouri Rep. Lyle Rowland is working to sponsor the bill and an initial draft has been written.

In the Gallagher deal, Jenkins and a staff of seven will remain in the Springfield office, 300 S. Jefferson Ave., Ste. 600, in Missouri State University’s Meyer Alumni Center, working under the direction of William Ziebell, head of Gallagher’s North Central employee benefit brokerage and compensation consulting operations.

The deal is among six acquisitions Gallagher & Co. closed in December and 15 since September.

“Larger agencies are able to acquire smaller companies primarily because of the ACA,” Jenkins said. “I was spending eight hours a day every day making sure my clients were in compliance. That’s not efficient. Large organizations are looking to provide that level of confidence to smaller organizations that their clients are going to be in compliance.”

Jenkins said he expects to spend less time on administrative tasks and more time writing and purchasing insurance plans for clients.

Gallagher & Co. shares closed Jan. 7 at $47.35, compared to a 52-week range of $35.07 to $48.49. The company, an insurance brokerage and risk management services firm with operations in 24 countries, has scheduled a fourth-quarter earnings release after the market closes Jan. 28.