Brown & Brown CEO: Growing through Acquisitions
Apr 28, 2011
The following article was published in the Daytona Beach News Journal on April 28, 2011:
B&B CEO: Growing through acquisitions
By Tom Knox
Brown & Brown Inc.’s overall revenues and profits grew last year because of acquisitions, but its ongoing business operations need to improve, the company’s chief executive officer acknowledged Wednesday.
Excluding acquisitions, the Daytona Beach-based national insurance agency’s revenues declined 4.7 percent last year, compared with revenues produced from ongoing operations in 2009.
“It’s not something we’re pleased about,” CEO J. Powell Brown told those attending the company’s annual shareholders meeting at The Shores Resort & Spa.
Strong internal growth is one of the company’s most important goals, he said.
Brown & Brown last year generated $973.5 million in revenues, a modest gain over the $967.9 million in revenues it had in 2009. The company in 2010 made $161.7 million in net profit, or $1.12 a share, up from $153.2 million, or $1.08 a share, in 2009.
Brown said his company could top $1 billion in revenues this year.
Brown & Brown last year made 33 acquisitions of smaller insurance agencies, triple its acquisitions in 2009, when potential sellers were uncomfortable parting with their devalued operations.
Last year’s acquisitions increased the company’s annual revenues by $70.6 million. As of March 31, the company has acquired 262 insurance intermediary businesses since 2003.
So far this year, the company has made 13 acquisitions worth $20.2 million in annualized revenue.
Shareholders asked few questions, but one man asked about the company’s lawsuit against former executives Jim Henderson and Tom Riley, who just a year ago were a key part of Brown & Brown’s leadership. Henderson was vice chairman. Riley was chief acquisition officer.
Brown & Brown last month sued the two men, accusing them of breaking their employment agreements by recruiting other acquisition specialists from the company to join their new firm, Lake Mary-based Assured Agencies.
On Monday, Brown & Brown filed a motion in court for a temporary injunction to halt Assured Agencies from conducting business while the lawsuit is ongoing. In creating a competing company, the former employees are treating their employment agreements as “mere bumps in the road … to overtake Brown & Brown,” the motion stated.
Brown on Wednesday declined to comment on the lawsuit.