BB&T to enter top 10 with McGriff, Seibels buy

RALEIGH, N.C.--BB&T Insurance Services Inc. is buying Birmingham, Ala.-based broker McGriff, Seibels & Williams Inc. in a stock-and-cash deal valued at $354 million.

The deal, which is subject to regulatory and shareholder approval, would likely catapult BB&T Insurance into the ranks of the world's 10 largest brokers. Based on 2002 brokerage revenues, the combined entity would have ranked as the world's seventh-largest broker, with $491.5 million in revenues, according to Business Insurance's most recent ranking (BI, July 21).

BB&T Insurance Services was the eighth-largest broker of U.S. business in 2002, based on $354.5 million in 2002 brokerage revenues, while McGriff, Seibels ranked as the 13th largest broker of U.S. business, with $137.0 million in brokerage revenues.

Raleigh, N.C.-based BB&T specializes in middle-market and small-market business. Its purchase of McGriff, Seibels, which specializes in large commercial and energy accounts, will give BB&T a platform to increase its national insurance presence, the company said in a statement.

"When you've had the kind of growth and success that BB&T Insurance Services has had over the years, it's the perfect time to step back and look for new ways to build on that momentum and continue to strengthen our fee-based business," Henry Williamson, chief operating officer of BB&T parent BB&T Corp., said in the statement.

McGriff, Seibels will operate as a wholly owned subsidiary of BB&T and will retain its name and management team.

Under terms of the transaction, BB&T will pay $50 million in cash and $304 million in stock based on BB&T's closing share price of $38.84 on Nov. 10. In addition, the deal allows for a total "earnout" payment to McGriff, Seibels shareholders of approximately $102 million in cash over a five-year period if the brokerage exceeds certain performance targets.

The deal is expected to close in the first quarter of 2004.