How Hub’s latest acquisition differs from the previous six

Hub International’s latest acquisition in Ontario is a bit of a break from its recent transactions in the country, which were focused on western Canada.

Chicago-based Hub announced Thursday that it had acquired Mississauga, Ont.-based independent employee benefits consulting firm GMS Insurance Inc. Last year, it acquired the affiliated Kitchener, Ont. operations of GMS. Before that, the global brokerage’s last six acquisitions (between May and July) involved brokerages or firms mostly in Saskatchewan and Alberta, but also one in British Columbia:

• Kelliher, Sask.-based personal and commercial lines brokerage Kelliher Agencies on May 6
• Calgary-based employee benefits firm Clarity Benefits Group on May 7
• On June 4, Kamsack, Sask. personal and commercial lines brokerage Cottenie and Gardner
• Vancouver-based retirement planning firm Porchlight Financial on June 6
• On July 2, Vancouver-based employee benefits firm BenefitLink Resource Group
• Berk Bilgen Insurance, an Edmonton-based personal and commercial lines brokerage, on July 3

Canadian Underwriter asked Tina Osen, president of Hub International Canada about Hub’s acquisition strategies, if there is any particular geographical interest in western Canada, and what these acquisitions bring to Hub that brokerages in other parts of the country don’t, for example.

“What we can’t control is timing on when businesses may become available for sale,” Osen said Thursday. “In regards to our last six acquisitions [excluding the most recent Ontario one], while they are western-Canadian focused, they are businesses that we have been in dialogue with for some time and it just so happened that much of the activity came to fruition in recent months.”

After that, Hub looks to acquire a business because it provides a niche or specialty that complements operations in Canada or specifically in a region, or provides the global brokerage with geographical expansion in a given area.

But “first and foremost, we always want to make sure that the seller’s operation is culturally a fit with Hub,” Osen emphasized. “We want to ensure that post the euphoria of a sale that all parties to the transaction feel that they can work together, that we are aligned with common values and focused on the same goals for the business post-sale.”

Hub has also had strong geographical representation across Canada, and is always strategic about where it acquires business, Osen said.

Are there particular challenges when acquiring a firm or brokerage? Every acquisition is different and each brings different opportunities – mixes of business that may vary firm to firm, Osen noted.

“We would work with each seller to work through these factors, understand circumstances behind them, and get agreement from the seller and us as the buyer in terms of how we would confront any challenges post-sale, and mitigate or eliminate any risks so that there were no surprises after the fact.”