Howden is in advanced talks to acquire the transactional liability (TL) specialist Atlantic Group in the latest move of the UK brokerage’s US retail platform build-out, this publication can reveal.
Sources said that the transaction will value Atlantic at over $500mn, including earnouts.
It is understood that the US M&A insurance broker retained investment bank Piper Sandler earlier this year to run a sale process.
Sources added that, besides Howden, the auction attracted the interest of strategic bidders including AJ Gallagher and Alliant, as well as private equity firms.
Founded in 2017 by majority shareholders David Haigh, Joe O’Brien and Richard French, Atlantic provides TL coverage including representations and warranties (R&W), tax indemnity and contingent products across North America and Latin America.
Haigh, O’Brien and French also founded a TL broker in Europe via a joint venture with Howden, but they sold their stake in that business to Howden in 2021 and focused solely on the North American and LatAm markets.
Now, as Howden seeks to expand into the US retail market, its swoop on the TL broker marks one of its most significant steps in this venture, as Atlantic is one of the largest brokers in the US M&A insurance space.
The firm employs hundreds of staff across offices in New York, Toronto, Jersey City, Boston, Washington DC, Los Angeles, Houston, San Francisco, Chicago, Miami and Dallas.
Howden began its long-anticipated entry into the US retail market this year. As Insurance Insider reported as early as 2023, this was a target area for Howden to address its desire to build a broker that could rival the Big Three in scope.
It looked set to enter the US via the $10bn acquisition of Risk Strategies.
However, after talks broke down around late March, it pivoted to a plan focused on team lifts and other hiring, potentially supported by acquisitions.
But unlike other lines of business, which will take time for Howden to build scale via mass hiring, the takeover of Atlantic will immediately turn the UK broker into one of the top five US TL brokers, only behind Marsh, Aon and Lockton.
Beyond TL, Howden is facing significant challenges from its push into US retail in other markets, which is being driven by aggressive hiring, including two mass team-lifts from Marsh and Aon that have taken its hires to ~300.
Its efforts have included moves to hire staff from former long-time retail broking clients of its London wholesale operations, including McGriff, Alliant and CAC – although the move on McGriff came after its sale to Marsh.
Howden’s move to put in place hundreds of staff by year-end has triggered significant backlash from US retailers and wholesalers.
As well as fending off lawsuits, Howden has also faced significant business diversions in London wholesale, where retailers are flexing their muscles to penalize Howden.
Alliant has moved significant chunks of its ~$1bn premium book from Howden and is understood to be working to move the rest. Meanwhile, Brown & Brown has initiated a review of the wholesale strategy for its ~$1.5bn-premium London book, the largest share of which sits with Howden.
The Atlantic deal follows increased M&A activity in the US TL segment over the past 12 months. Last month, for instance, Insurance Insider US revealed that CRC is in advanced talks to acquire the TL MGA Euclid Transactional.
Last year, the RedBird-backed MGA platform Bishop Street struck a deal to acquire the TL arm of Ethos Specialty from Ascot.
Atlantic and Howden declined to comment.
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