NU Online News Service, Dec. 19, 10 a.m. – Greater Bay Bancorp, Palo Alto, Calif., says its has reached agreement to acquire ABD Insurance and Financial Services, Inc., Redwood City, Calif.
ABD is the 16th largest insurance broker in the United States, based on 2000 revenues, Greater Bay says.
A source familiar with the deal confirms that it is one of the largest agency acquisitions ever by a U.S. bank. ABD reported over $1 billion of insurance premiums serviced and more than $100 million in revenue this year. The company sells group health plans, employee benefits and a range of other financial services, along with a variety of commercial lines.
The ABD market area overlaps that of Greater Bay Bancorp, which owns 11 northern California subsidiary banks.The bank says the ABD focus on mid-size and Fortune 1000 businesses complements its own existing and target client base.
The agreement provides ABD shareholders an initial payment of $130 million, which includes $72.5 million in 7.25% convertible preferred shares of Greater Bay and $57.5 million in cash.
If ABD meets earnings goals set forth in the agreement, the current owners of the agency could get as much as $70.5 million in additional cash and convertible preferred stock between 2002 and 2004.
Key ABD executives have signed four-year employment and non-competition agreements, and the deal agreements also offers key employees a chance to earn further incentives over a five-year period, Greater Bay says.
Completion of the deal is subject to approval by ABD shareholders and regulators.