Mesirow to assume Near North's Chicago accountsReprints
CHICAGO--After two failed attempts to sell substantially all of its brokerage operations in one large deal, Near North National Group is hoping its parts will prove more attractive than the whole.
Near North has agreed to transfer its Chicago office accounts and employees to Chicago-based Mesirow Insurance Services Inc. The deal represents the first move under Near North's new strategy to try and sell its brokerage operations on piecemeal basis, rather than as a complete package.
In addition, Near North's wholesale brokerage operation, Chicago-based DMI Brokerage L.L.C., on Wednesday reached an agreement with Near North owner Michael Segal to transfer his roughly 50% ownership in DMI back to the company's two managing directors.
The latest deal follows the collapse of a proposed acquisition of most of Near North's brokerage assets by Chicago-based Hub International Ltd. Hub provided little explanation for scrapping the deal, saying only that it was unable to come to agreement on terms. The failed Hub deal came on the heels of the collapse of private equity investment firm Frontenac Co. L.L.C.'s attempted purchase of Near North's brokerage operations, which fell through in July for unspecified reasons (BI, July 28).
On Friday, Mesirow Insurance announced it would assume the accounts of Near North's Chicago office and take on some of its Chicago-based employees. Under the deal, no payment was made up front, but Mesirow will pay Near North a percentage of commissions on accounts that renew, according to Crain's Chicago Business.
"This is no attempt. This is a deal that is signed, sealed and closed," said James C. Tyree, chairman and chief executive officer of Mesirow Financial, the broker's parent company. "It's a phenomenal opportunity for both Near North and us," he said. "It's a great way for all the folks involved to have a win-win from everybody's perspective."
In a statement on the deal, Mr. Segal said: "This is an exciting opportunity for both associates and clients to be able to blend our cultures. We appreciate the loyalty and dedication that our associates have shown during this very long and difficult time. We will be working with Mesirow Financial to transition as many of our staff as possible, recognizing that there will be some duplication in service and infrastructure."
In another move this week, Chicago-based wholesaler DMI severed its Near North ties through a management buyout, confirmed Russell DeLuca, a managing director. Mr. DeLuca and Joseph Messina now wholly own DMI.
"There are no changes at DMI other than the ownership," Mr. DeLuca said. "We're excited about it, obviously, and the new opportunities that this is going to present for us."