BB&T Completes Swett & Crawford Acquisition for $500M

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BB&T Corporation BBT closed the deal to acquire Swett & Crawford from U.K.-based global wholesale, underwriting management and reinsurance broking group, Cooper Gay Swett & Crawford, for $500 million in cash. The acquisition was announced by the company in Feb 2016.

The transaction, which exceeds BB&T's acquisition criteria, is expected to add more than $200 million in annual revenue or an additional 15% to BB&T Insurance. Moreover, the company is anticipated to record around $500 million of goodwill and intangibles.

Also, the transaction excludes non-U.S. operations, which account for less than 5% of Swett & Crawford's total revenue. Moreover, the deal will help BB&T expand its insurance unit and diversify the company's overall fee income profile.

Swett & Crawford will operate as part of BB&T's wholesale property and casualty broker and managing general agent, CRC Insurance Services.

Cooper Gay Swett & Crawford's North American business unit - Swett & Crawford, formally known as CGSC North America Holdings Corporation - was put on sale in November last year with the intention to use the sale proceeds to reduce or eliminate company debt and improve the capital structure.

CGSC North America includes the wholesale broker Swett & Crawford, which had merged with Cooper Gay to become Cooper Gay Swett & Crawford in 2010.

Notably, BB&T funded the deal with cash allocated to share repurchases in the 2015 capital plan.

At a time when many large regional players like SunTrust Banks, Inc. STI , and KeyCorp. KEY are shying away from full-bank acquisitions owing to increasing regulatory scrutiny, BB&T remains an active acquirer. In Aug 2015, the company completed the acquisition of Susquehanna Bancshares, Inc., while in June it purchased The Bank of Kentucky Financial Corporation. Further, it is set to complete the acquisition of National Penn Bancshares Inc. NPBC this year.

With its strong capital and liquidity position, we believe BB&T will continue to grow through acquisitions, going forward. This, in turn, will support the company's top-line growth, which is presently under pressure owing to a low interest rate environment and reduced loan demand.

Currently, BB&T carries a Zacks Rank #3 (Hold).

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This article appears in: Business , Investing , Stocks
Referenced Symbols: BBT , STI , KEY ,

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