Lockton Cos. Inc., the largest privately held broker and 11th-largest U.S. broker, announced its acquisition of Alexander Forbes International Risk Services. In buying the international brokerage of Alexander Forbes Ltd., Lockton displayed the guiding principles espoused by its chairman and namesake, David M. Lockton.
In everything the Kansas City, Mo.-based broker does, it seems to follow a mix of simple, trusted Midwestern values and a spirit of independence that would impress the Fathers of the American Revolution.
Lockton the man and the company have as a primary priority the sustainability of their independence. It is this independence that allows Lockton associates to deliver upon the company's official motto: "We live service."
And it's this appreciation for independence that can explain why Lockton (the man) agreed to the purchase of Alexander Forbes International Risk Services. Lockton (the company) had collaborated with the firm for the past decade, to provide international insurance and risk management to Lockton's U.S.-based clients.
But Lockton wanted to ensure that his company could count on Alexander Forbes to provide these services, independently and indefinitely. Hence the buyout.
"There was no guarantee that Alexander Forbes International Risk Services was going to remain an independent broker forever," Lockton said, "and we wanted to assure ourselves that our private ownership model is permanently sustainable. So now by purchasing them, we own our service network, and so we don't have to worry about anyone else buying it."
And because of the previous relationship between the two companies, Lockton's confident that the acquisition will work.
"We like top management a lot," he said. "We don't think they have very far to go to be very Locktonesque."
Locktonesque? In the chairman's own words, Lockton (the adjective) means: "Focus first and foremost on the customer, without having to be concerned about the next quarterly profits. And having an economic model that allows us to have more, better-paid people working on a given account."
After regulatory approvals, the $170 million deal should close by October, with both companies operating as separate subsidiaries. The new Lockton Cos., according to wire reports, will have revenues upward of $600 million and 3,700 employees across North America, Europe, Asia and Latin America.
September 15, 2006
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