Core Viewpoint - Brown & Brown, Inc. has announced a public offering of 39,215,686 shares of common stock at a price of $102.00 per share, totaling an aggregate offering amount of $4 billion, expected to close on June 12, 2025 [1][3] Group 1: Offering Details - The offering price is set at $102.00 per share, with an aggregate amount of $4 billion [1] - The underwriters have a 30-day option to purchase an additional $400 million in shares at the public offering price [1] - The expected net proceeds from the offering are approximately $3.9 billion after deducting underwriting discounts and expenses [3] Group 2: Use of Proceeds - The net proceeds will primarily fund a portion of the consideration for the acquisition of RSC Topco, Inc., the holding company for Accession Risk Management Group, Inc. [3] - If the acquisition does not occur, the proceeds will be used for general corporate purposes [3] Group 3: Underwriters - J.P. Morgan and BofA Securities are the lead book running managers for the offering [2] - Additional book running managers include BMO Capital Markets and Truist Securities, with several co-managers involved [2] Group 4: Company Overview - Brown & Brown, Inc. is a leading insurance brokerage firm with over 500 locations and a team of more than 17,000 professionals [6]

Core Insights - Brown & Brown, Inc. (BRO) shares have increased by 20.4% over the past year, underperforming the industry and Finance sector growth rates of 23.4% and 20.7%, respectively, but outperforming the Zacks S&P 500 composite return of 11.6% [1] - The company has a market capitalization of $30.91 billion, with an average trading volume of 1.8 million shares over the last three months [1] Valuation - BRO shares are trading at a premium with a price-to-forward 12-month earnings ratio of 24.9X, compared to the industry average of 22.71X [4] - Other insurers like Arthur J. Gallagher & Co. (AJG) and Erie Indemnity Company (ERIE) are also trading at multiples higher than the industry average, while Marsh & McLennan Companies, Inc. (MMC) is trading at a discount [4] Growth Projections - The Zacks Consensus Estimate for BRO's 2025 earnings per share indicates an 8.5% year-over-year increase, with revenues projected at $5.20 billion, reflecting an 8.2% improvement [5] - For 2026, the consensus estimates suggest an increase of 8.8% in earnings per share and 8.1% in revenues compared to 2025 [5] - Earnings have grown by 21.5% over the past five years, surpassing the industry average of 15.2% [6] Strategic Initiatives - BRO has completed 687 acquisitions since 1993, leveraging strategic buyouts to capture market opportunities and enhance its product and service portfolio [8][13] - The company has a strong liquidity position supported by its diverse business model and operational expertise [14] - BRO has raised dividends for 30 consecutive years, with a five-year compound annual growth rate (CAGR) of 8.7% [8][15] Analyst Sentiment - Recent bearish sentiment from analysts has led to lowered estimates for 2025 and 2026, with the consensus estimate for 2025 earnings down by 0.4% and for 2026 down by 1.3% over the past 60 days [9] - The average price target from 13 analysts is $119.77 per share, indicating a potential upside of 8.3% from the last closing price [10] Revenue Drivers - Commissions and fees, the main revenue component, benefit from increasing new business, strong retention, and continued rate increases across most coverage lines [12] - The company has met its intermediate annual revenue goal of $4 billion, doubling its revenue in the last five years [12] Conclusion - Factors such as new business, strong retention, rate increases, strategic buyouts, and a solid dividend history position the company well for future growth [16] - The robust capital position reflects financial flexibility, supporting ongoing investments and shareholder returns [16]

Brown & Brown to Acquire RSC June 10, 2025 Information Regarding Forward Looking Statements This presentation contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. You can identify these statements by forward-looking words such as "may," "will," "should," "expect," "anticipate," "believe," "intend," "estimate," "plan" and ...

Summary of Brown & Brown (BRO) M&A Conference Call Company and Industry - **Company**: Brown & Brown Inc. (BRO) - **Acquisition Target**: RSC Topco Inc., parent company of Ascension, which includes Risk Strategies and 180 - **Industry**: Insurance solutions and brokerage Core Points and Arguments 1. **Acquisition Announcement**: Brown & Brown announced the pending acquisition of RSC Topco Inc. for approximately $9.8 billion, with $9.4 billion due at close [5][18] 2. **Financial Metrics**: Ascension's 2024 pro forma adjusted revenue is projected at $1.7 billion with adjusted EBITDA of $600 million [13][17] 3. **Strategic Rationale**: The acquisition aims to enhance Brown & Brown's capabilities and market position, combining two compatible businesses with a focus on client service and sales growth [12][33] 4. **Cultural Alignment**: Both companies share a similar decentralized sales-focused operating model and culture, which is seen as crucial for successful integration [11][33] 5. **Growth Projections**: Brown & Brown aims to grow from approximately $5 billion in revenue to $8 billion and beyond, leveraging both organic growth and acquisitions [10][26] 6. **Synergy Expectations**: The company anticipates realizing $150 million in synergies by 2028, with $20 million from revenue synergies and $130 million from expense synergies [22][24] 7. **Funding Strategy**: The acquisition will be funded through a $4 billion equity raise and the issuance of $4 billion in senior unsecured notes [20][28] 8. **Credit Ratings**: Fitch has rated Brown & Brown at BBB flat, indicating strong credit quality, which supports the funding strategy [20][28] 9. **Historical Performance**: Over the past decade, Brown & Brown has achieved a compounded revenue growth rate of nearly 12%, increasing from $1.7 billion to over $4.8 billion [26][29] 10. **Cash Flow Generation**: The company generated approximately $1.2 billion in operating cash last year, maintaining a strong cash flow conversion rate [27][29] Additional Important Content 1. **Integration Management**: A robust integration management office has been established to ensure successful integration and realization of synergies [24] 2. **Deferred Tax Asset**: Brown & Brown will acquire a deferred tax asset valued at approximately $600 million, expected to be realized over the coming years [21][25] 3. **Market Positioning**: The acquisition is expected to enhance Brown & Brown's market position in the middle market and specialty distribution sectors [12][14] 4. **Employee Growth**: The acquisition will add over 5,500 new teammates to Brown & Brown, expanding its workforce significantly [33][34] 5. **Risk Management**: The company has set aside $750 million in escrow to cover potential costs related to runoff claims from discontinued businesses [21][70] This summary encapsulates the key points discussed during the conference call regarding the acquisition of RSC Topco Inc. by Brown & Brown, highlighting the strategic, financial, and operational aspects of the deal.

Core Viewpoint - Brown & Brown, Inc. has announced an agreement to acquire Accession Risk Management Group, Inc. for a gross purchase price of $9.825 billion, expected to close in Q3 2025, subject to regulatory approvals [2][3][4] Company Overview - Brown & Brown, Inc. is a leading insurance brokerage firm with over 17,000 professionals and a global presence across 500+ locations, providing customer-centric risk management solutions since 1939 [8] - Accession Risk Management Group, established in 1997, is the ninth largest privately held insurance brokerage in the U.S., with pro forma adjusted revenues of approximately $1.7 billion for 2024 and over 5,000 insurance professionals [3][9] Transaction Details - The acquisition will be executed on a cash and debt-free basis, with the waiting period for antitrust filings already expired [2] - Following the acquisition, Risk Strategies will integrate into Brown & Brown's Retail segment, while One80 Intermediaries will join the new Specialty Distribution segment [4] Strategic Benefits - The acquisition aims to combine two culturally aligned organizations, enhancing customer relationships and expanding market offerings [5] - It is expected to drive shareholder value through anticipated revenue and cash flow growth, with acquired operations estimated to be accretive to Brown & Brown's 2024 adjusted diluted net income per share [6]

Group 1 - Albert Anthony is a Croatian-American media personality and analyst for financial media platforms Investing.com and Seeking Alpha, with over 1,000 followers since 2023 [1] - He has covered more than 200 companies across multiple sectors, focusing on dividend stocks [1] - Albert Anthony has experience as an analyst in the IT sector and was part of the IT team at a top 10 financial firm in the US [1] Group 2 - He holds a B.A. from Drew University and has completed coursework through the Corporate Finance Institute and Coursera [1] - A new book is planned for launch in 2025 on Amazon, discussing his methodology as an analyst and how he rates stocks [1] - The Albert Anthony brand is owned by Albert Anthony & Co., a sole proprietorship registered in Austin, Texas [1]

Company Overview - Brown & Brown (BRO) shares have increased by approximately 3.8% over the past month, underperforming the S&P 500 [1] - The most recent earnings report is essential for understanding the key drivers affecting the stock [1] Earnings Estimates - Estimates for Brown & Brown have trended downward over the past month, indicating a negative outlook [2][4] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4] VGM Scores - Brown & Brown has a subpar Growth Score of D and a Momentum Score of F, placing it in the lowest quintile for value strategy [3] - The overall aggregate VGM Score for the stock is F, which is significant for investors not focused on a single strategy [3] Industry Comparison - Brown & Brown is part of the Zacks Insurance - Brokerage industry, where competitor Marsh & McLennan (MMC) has seen a 4.3% increase in shares over the past month [5] - Marsh & McLennan reported revenues of $7.06 billion for the last quarter, reflecting a year-over-year increase of 9.1% [5] - The expected earnings for Marsh & McLennan for the current quarter is $2.66 per share, indicating a 10.4% increase from the previous year [6]

Core Insights - Vertafore recognized Brown & Brown with the 2025 Agency Impact Leader Award for its leadership and impactful decisions in the insurance industry [1] - Brown & Brown has been providing customer-centric risk management solutions since 1939 and is among the top 10 insurance brokerage firms globally [2] - The company operates over 500 locations and employs more than 17,000 professionals, focusing on strategic investments that benefit customers and the insurance ecosystem [2] Company Operations - Brown & Brown utilizes AMS360® to create centralized service centers and specialized practices, enhancing operational efficiency and customer service [3] - The collaboration with Vertafore has been pivotal in shaping AMS360 to meet the evolving needs of modern insurance agencies [3] Industry Impact - Vertafore's CEO highlighted Brown & Brown's commitment to delivering scalable and innovative strategies, emphasizing their role in positively shaping the insurance industry's future [4] - Vertafore, as a leader in InsurTech, aims to simplify and automate the insurance lifecycle, benefiting independent agents, MGAs, and carriers [5]

Core Insights - Brown & Brown, Inc. has acquired the assets of Tim Parkman, Inc. (TPI), enhancing its position in the insurance brokerage market [1][2] Company Overview - TPI, established in 2002, is a full-service wholesale insurance brokerage based in Clinton, Mississippi, initially focused on personal lines and later expanding into commercial lines [2] - TPI serves over 5,000 retail agents using a proprietary technology platform to deliver superior service [2] - TPI will continue to operate under the leadership of President Mike Leach, with Tim Parkman remaining involved in the business [2] Strategic Fit - The acquisition is expected to complement Bridge Specialty Group's offerings, particularly in Mississippi and the Gulf States, enhancing its specialized product suite and distribution capabilities [3] - Steve Boyd, president of Bridge Specialty Group, expressed excitement about the integration of TPI into their operations [3] Bridge Specialty Group Profile - Bridge Specialty Group is a global insurance wholesaler with access to over 230 admitted, excess, and surplus lines, managing a premium book exceeding $7 billion [4] - The company operates more than 50 locations with a workforce of 2,000 across the U.S., U.K., Europe, and Asia, providing tailored insurance solutions through various practice groups [4] Brown & Brown, Inc. Profile - Brown & Brown, Inc. is a leading insurance brokerage firm with a global presence across 500+ locations and a team of over 17,000 professionals [5] - The company has been delivering customer-centric risk management solutions since 1939, focusing on scalable and innovative strategies for clients [5]

Financial Data and Key Metrics Changes - The company reported revenues of $1,400,000,000 for Q1 2025, representing an 11.6% increase in total revenue and a 6.5% organic growth compared to the same period last year [5][17] - Adjusted EBITDAC margin improved by over 100 basis points to 38.1%, and adjusted earnings per share grew over 13% to $1.29 [5][17] - Income before income taxes increased by 17.4%, and EBITDAC grew by 14.8% [17] - The effective tax rate for the quarter increased slightly to 21.8% from 19.5% in the prior year [17] Business Line Data and Key Metrics Changes - The Retail segment achieved total revenue growth of 12.5% with organic growth of 4.1% [20] - The Programs segment reported total revenues increasing by 10.1% and organic growth of 13.6% [22] - The Wholesale Brokerage segment had total revenues increase of 12% with organic growth of 6.7% [23] Market Data and Key Metrics Changes - Insurance pricing for most lines continued to see rate increases, although they are moderating slightly compared to last year [7][10] - Rates for U.S. Employee Benefits remained consistent with prior quarters, with medical and pharmacy costs up 7% to 9% [9] - Cat property rates declined between 10% to 25% during the quarter due to increased availability of capital [12] Company Strategy and Development Direction - The company continues to focus on M&A activity, completing 13 acquisitions with estimated annual revenues of $36,000,000 [5][13] - Management emphasized the importance of cultural alignment in acquisitions and expressed confidence in the company's strong balance sheet and cash flow [27] - The company aims to capture opportunities through broad diversification across geographies, customer sizes, and lines of coverage [28] Management's Comments on Operating Environment and Future Outlook - Management noted that economic expansion will be influenced by inflation, tariffs, and interest rates, with a cautious outlook from business leaders [6][25] - The company expects continued growth in the second quarter, driven by a stable economic backdrop despite potential ups and downs [28] - Management anticipates that rates for admitted and non-admitted lines will not see material changes, except for cat property, which may continue to decrease [26] Other Important Information - The company generated approximately $215,000,000 in cash flow from operations, an increase of $200,000,000 over the first quarter of the previous year [23][24] - The company deferred the payment of approximately $90,000,000 of federal income taxes, which will impact cash flow conversion in the second quarter [24] Q&A Session Summary Question: Impact of Quintas on retail margin and timing shift - Management indicated that about 60% of Quintas' revenues came in the first quarter, leading to higher margins in that quarter but lower margins in subsequent quarters [31] Question: Outlook for earned premium in captives - Management expects earned premium in captives to be slightly up over last year, with no significant organic growth anticipated in the following quarters [34] Question: Downward impact on organic growth from cat property pricing - Management clarified that the downward trend is not solely due to cat property pricing, as other factors are contributing to growth [42] Question: Outlook for flood business - Management expressed uncertainty regarding the federal flood program's reauthorization, indicating that it is critical for homeowners [59] Question: Cost of risk in Florida - Management noted that while costs for cat property are decreasing, overall costs for homeowners are increasing due to rising construction costs [66] Question: MGA business outlook - Management believes interest in the MGA business will continue due to the quality of underwriting and the potential for large chunks of premium [92] Question: Margin outlook for 2025 - Management confirmed that margins are expected to be flat for 2025 compared to 2024, with Q1 performance meeting expectations [102] Question: Non-cat property pricing equilibrium - Management stated that while non-cat property pricing appears stable, it is contingent on the upcoming hurricane season [116]