Good morning and welcome to Arthur J. Gallagher & Company's call to discuss the acquisition of AssuredPartners. Participants have been placed on a listen-only mode. Your lines will be open for questions following the presentation. Today's call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meaning of the securities laws. The company does not assume any obligation to update information or forward-looking statements provided on this call. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the information regarding forward-looking statements and risk factors contained in the company's 10-K, 10-Q, and 8-K filings for more details on its forward-looking statements. In addition, for reconciliations of the non-GAAP measures discussed on this call, as well as other information regarding these measures, please refer to the presentation in the Investor Relations section of the company's website. It is now my pleasure to introduce J. Patrick Gallagher, Chairman and CEO of Arthur J. Gallagher & Company. Mr. Gallagher, you may begin. Thank you very much. Good morning and thank you for joining us today on such short notice. On the call through this morning is Doug Howell, our CFO. We will also be referencing the presentation that is posted on our IR website during today's call. Let me begin by saying we're extremely excited to announce that we have signed a definitive agreement to purchase AssuredPartners. AssuredPartners, as many of you know, is a fast-growing U.S. middle-market-centric retail and specialty insurance brokerage franchise. I've known Jim Henderson and Randy Larsen, and the management team for a long time and have held the AssuredPartners franchise in high regard since its founding in 2011. It was on a short list of potential larger merger partners, and when the opportunity presented itself, we quickly confirmed our view that a combination would be extremely compelling strategically, culturally, and financially. The combination complements our core strategy by deepening our footing in the commercial middle market space. It's a section of the market we know very well, having operated there for nearly a century, and the specialty businesses are fantastic and are a nice mix of risk pool administration, programs, MGA, MGU, and other wholesale operations. I have to say our due diligence confirmed that AssuredPartners' business and talent are top-notch. They are growing organically through M&A and are operating at attractive margins today. In so many ways, the business is a lot like Gallagher, and to the new 10,900 colleagues that will be joining the Gallagher family of professionals, let me say right now you are going to feel right at home within the Gallagher culture. Let's go to the presentation. I'll start by giving you an overview of the transaction on slide seven. In total, we are acquiring $2.9 billion of pro forma trailing 12-month revenue, $938 million of pro forma trailing 12-month adjusted EBITDA, if you include $160 million of estimated synergies that would bring pro forma adjusted EBITDA to $1.1 billion. Total gross purchase price is $13.45 billion and $12.45 billion after giving effect to a $1 billion deferred tax asset. So the net consideration multiple on EBITDA, including synergies, is 11.3x. That is a really compelling price and valuation. Moving to an overview of the business on slide eight. According to Business Insurance, AssuredPartners was the 11th largest U.S. insurance broker at year-end 2023, placing around $11 billion of premium. It has 400 offices that are spread across 40 U.S. states, the U.K., and Ireland. Similar to Gallagher, the business is geographically diverse and has limited local overlap with Gallagher today. Most of AssuredPartners' revenue is derived in the U.S., and about 60% of the revenues are retail P&C, about 25% are retail benefits, and the remaining 17% are wholesale specialty operations. Slide nine shows our pro forma business mix on a trailing 12-month basis combined around $14 billion of revenue. Now, let me talk about the strategic rationale for this acquisition on slide 10. As I mentioned, Gallagher's commercial middle market focus has been fundamental since our founding. In our view, the commercial middle market is the most attractive segment. Clients here tend to be growing and have complex insurance and human capital needs that demand expert advice from a trusted advisor. Importantly, this combination will, one, further expand Gallagher's middle market property casualty and employee benefits focus across the U.S. Two, build on new business opportunities by leveraging Gallagher's expertise, data and analytics, and expansive product offerings. Three, deepen Gallagher's capabilities across multiple niche practice groups, including transportation, energy, healthcare, government contractors, and public entity. Four, create opportunities for Gallagher's wholesale, reinsurance, and claims management business. And five, expand the reach of our tuck-in merger and acquisition strategy. And we believe this can be done against the backdrop of two highly compatible entrepreneurial sales-based cultures. Turning to slide 11, AssuredPartners has a strong track record of growth and profitability. Over the past three calendar years, our average organic was about 6%. Total revenues have grown around 19% per year due to an active M&A strategy. And adjusted EBITDA margins have been at or above 30% in each of the past three years. So a fast-growing, profitable franchise. Turning to slide 12, an AssuredPartners merger strategy. Since its founding, the firm has acquired around 500 mergers. That includes more than 200 mergers since 2020 that were completed at a similar multiple as Gallagher's tuck-in mergers. Most of AssuredPartners' merger partners were locally sourced, so they joined without a competitive process. In fact, there were only a small portion of AssuredPartners' mergers where Gallagher even got a look. They have a really strong M&A team, and thus we think will add to our M&A capabilities and capacity over the short, intermediate, and long term. Slide 13 provides a view of AssuredPartners' U.S. revenue by region. As you can see, its U.S. revenue base is very diverse. Shifting to more detail by business, starting with the retail operations on slide 14. Approximately $2.4 billion of pro forma revenue focused on commercial P&C and employee benefits, and personalized coverage. About two-thirds of the business in U.S. P&C, 30% in benefits, and the remainder in international property casualty. Similar to Gallagher, AssuredPartners has specialized industry and product verticals with 12 distinct niche practice groups. The combination will increase our U.S. retail niche revenue meaningfully across agriculture, aerospace, construction, real estate, transportation, and government contractors. Flipping to wholesale specialty on the next slide, around $500 million of revenue, with about half stemming from risk pool administration, or RPA, 40% from programs, MGA, MGU business, and the remaining portion a collection of brokerage and binding and other specialty operations. We are really excited to expand the RPA business. Here they are focusing on public entity and school district clients across a number of different states, counties, and municipalities. It will be a nice complement to our existing RPA business. Programs, MGAs, MGUs are another exciting opportunity for us with this combination, allowing us to expand into numerous well-developed and mature programs across both products and industries. So the takeaway is AssuredPartners is a diverse franchise by product and geography, operating with a similar strategy and delivering strong financial performance with a compatible culture. This is a compelling opportunity to build on each company's momentum together as one. This is an exciting day for Gallagher. I'll stop there. Turn it over to Doug to discuss the terms and financials in more detail. Doug? Thanks, Pat, and thanks everyone for hopping on the call this morning. From my view as CFO, I see this as a compelling merger that complements our U.S. growth strategy. All right, my comments this morning will follow the presentation focused on the transaction terms, synergies, and integration. Then we can move to Q&A. All right, let's go back to page seven just to make sure we get through this. As Pat mentioned, AssuredPartners' adjusted trailing 12-month pro forma revenues as of September 30, 2024, were $2.9 billion, and trailing 12-month pro forma EBITDA as of September 30, 2024, was $938 million. If you layer in expected synergies of $160 million, pro forma adjusted EBITDA, including synergies, is up to $1.1 billion. The gross consideration we're paying is $13.45 billion, or 14.3x a pro forma adjusted EBITDA. After factoring the estimated $1 billion present value deferred tax asset, we will assume upon closing and layering the effect of the synergies, the net multiple declines to about 11.3x. That's a really attractive multiple and well below the multiple where we are currently trading. Of the total consideration, we're expecting to finance this using a combination of long-term debt, short-term borrowings, cash on hand, free cash flow, and common equity. The split we've assumed between debt and equity allows us to maintain a prudent leverage ratio and is reflective of our commitment to a solid investment grade rating. Looking ahead, we don't see this transaction as slowing our ongoing tuck-in M&A strategy. Tuck-in acquisitions are an integral part of our growth story, and as Pat said, we believe we'll get more opportunities for tuck-ins when we combine with AssuredPartners. With the contemplated balance of free cash, debt, and equity financing, we would estimate AssuredPartners' operations, including the impact of synergies, would be 10%-12% accretive to our September 30, 2024, trailing 12-month adjusted GAAP earnings per share. That's really, really terrific. AssuredPartners has already runs at healthy EBITDA margin, but as I just noted, we estimate synergies of about $160 million. That split is about a third revenue synergies related to commission adequacy, supplementals, and contingents, and higher interest income on fiduciary cash. The remainder of the synergies are related to opportunities we see within real estate systems and further utilization of our Gallagher Center of Excellence, and given our focus on operational excellence across the organization, longer term, we do see further opportunities. As for integration, we are expecting to spend around $500 million in total over three years. About a third related to incremental non-cash stock retention awards and two-thirds to operational integration. Major integration expenses include the cost to migrate agency management systems, general ledgers, HR systems, and other various system consolidation. The remainder of the expected costs are associated with hardware, real estate, other data, and IT-related projects. We have a long-term track record of successful mergers, and we know how to integrate operations like AssuredPartners. Let me reiterate. This acquisition obviously is an exciting opportunity for Gallagher. It adds scale, allows us to further leverage our data and analytics, provides opportunities for our wholesale, reinsurance, and claims management operations, and expands our tuck-in M&A strategy. Most importantly, we'll add a group of talented professionals with a compatible culture. Financially, the merger provides a really attractive double-digit adjusted earnings per share accretion, all the while maintaining our conservative financial profile and our commitment to our investment grade rating. Before we move to Q&A portion, let me remind everyone that the topic of today's call is the acquisition of AssuredPartners and not our expectations for fourth quarter financial results. While we have not yet closed our books for the month of November, there was nothing in our October financial results that would give us a reason to change our outlook at this time. So with that said, I'll turn it over to the operator for questions on the acquisition. Thank you. The call is now open for questions. If you have a question, please pick up your handset and press star one on your telephone at this time. If you are on a speakerphone, please disable that function prior to pressing star one to ensure optimum sound quality. You may remove yourself from the queue at any point by pressing star two. Again, that's star one for questions. Our first questions come from the line of Elyse Greenspan with Wells Fargo. Please proceed with your questions. Thanks. Good morning. Good morning, Elyse. My first question is on the synergies. What's the timeframe on the realization of that $160 million? And then I'm assuming the full realization is embedded within the EPS accretion that you outlined with the deal. Yeah, let me make sure I explain that. We went back since we were giving you trailing 12-month 930 numbers. We went back and said if we were standing on October 1st of 2023, what projects do you think that we could put in place that would enhance revenue and reduce costs if we started on October 1st last year so that by the time we get done with September 30, 2024, we think we could have had revenue uplifts of about $60 million and we could have put cost efficiencies in place for about $160 million? So that's how we arrived at getting to the pro forma trailing 12 months. How long will it take us to achieve it? Well, if we were standing a year ago on that and came up with that number, I think we should be able to achieve most all of that within a year. Okay, thanks. And then how much are you guys taking on any debt from AssuredPartners in the transaction? And if so, how much? No, none. Okay, so no debt. Is there an earnout on the transaction and anything you can say about that, just magnitude and timeframe that would be associated with it? No, there's not. And then are the AssuredPartners owners? I know there's an equity offering here, Doug, but are the AssuredPartners owners going to be taking any Gallagher stock in the deal or they're just fully monetizing with this transaction? They will not be taking any of our stock. Okay, thank you. Sure, thank you, Elyse. Thanks, Elyse. Thanks, Elyse. Thanks for being on. Thank you. Our next questions come from the line of Mark Hughes with Truist Securities. Please proceed with your questions. Hello, Mark. Yeah, thank you. Hello, Pat. Good morning. Hi, Mark. Could you talk about AssuredPartners, their kind of level of integration, how their systems compared to yours, also their experience with employee retention? I'm sorry, you want me to talk about those two things? Well, first of all, let's start with systems. This is what we do. We're very, very good at this. We've got to look at it as right down the middle of our fairway. They've actually kind of done our work for us when it comes to these acquisitions. You'll see in the presentation that 94% of the acquisitions they've done are deals that we never even got to look at. They have a compelling story, and the systems are not the same systems we have, but we'll have a plan to integrate those over the next year, and that's what we're really good at. What were the other questions on that, Mark? Yeah, let me add to that one before you go to your next one, Mark. I think the fact is we look at this as 300 tuck-in acquisitions. We've done hundreds and hundreds of those. Our systems are architected. So the two of us will sit down, and I think we're doing this merger at exactly the right time. They have harnessed a lot of effort, work, and smarts around their self-integration plan, and I think together we'll be able to get these on common systems over the course of the next two to three years. The other part of that was just employee retention at AssuredPartners? Well, that's a really key thing here, Mark. You'll notice that in the details, our integration savings, $160 million is not coming from laying a lot of people off. That's not the gist here. Gallagher in the United States probably has to hire 5,000 people a year just to keep up with our turnover at the present state that we're in now. So with this addition of these people, we're getting a great group of people that look just like Gallagher about 12 years ago. Systems are different around with the branches they bought, etc., and there's a very deep understanding on their part that integration of their systems and the like is necessary. So we're actually giving them a path forward that is additive to all the work that they've already done. So this is not about finding a lot of jobs to let people go. Quite the opposite. We're viewing this as a better opportunity for everybody. We're telling our leadership team, "Get ready, your job is growing." We're telling their leadership team, "Get ready, your job is growing." We got lots of needs for good, solid people in this company, and this is not about synergizing out jobs. Yeah, and on the retention side, we do have over $200 million of initial stock-based retention awards that we'll be using to recognize the contributors at AssuredPartners and really putting them on equal footing of what our folks have in terms of retention awards and like-for-like areas. So we'll be doing that. You'll see that on page 21 of the presentation. And then those folks obviously will be eligible for our annual awards that we do every year in our stock-based compensation plan. So one stock, it's all on the same stock. We all pull on the same horse. We're going to get the recognition awards into people's hands that provide our retention, but also a recognition of their contributions. So that work is ongoing right now as we speak. And culturally, Mark, I think you understand the culture quite well. This is a very producer-centric organization. They get up just like us every morning thinking about what do we sell today? What accounts are we keeping? What are we growing? Who's the new account on the list? And it just fits very, very naturally. Then I appreciate that. One One follow-up, the deferred tax asset, what's the timing on your ability to utilize that? With your clean energy credits, is there some limitation on how much you can use in aggregate? And then is that taken into account? Is that an NPV of the deferred tax asset that you've disclosed, or is that the gross deferred tax asset? Let me go through that. First of all, that's the NPV. You have to think about that as us factoring a receivable. So on that asset, we get to use that asset whether AssuredPartners ever makes another dime ever again in their life. That could go to offset. So you think about that. We're factoring a receivable, and I think we discounted it somewhere in the 6%-8% range, something like that. It runs off about 10% a year for the next five years, and then it kind of trails off. So it's really kind of the average life on this is probably somewhere around seven years, something like that on it. So we factored the receivable from that. It gets to offset our own income. It sure never makes another penny. And more importantly, you get to use that before you use your tax credit. So, for us, the EBITDA that's created, we've always said that we're paying about, take our EBITDA, take it times 8%-10%, and you'll get the cash taxes paid. Well, on this acquisition, the number will be somewhere probably around 5% of cash taxes paid because we pick up the deferred tax asset. So, the utilization of our tax credits, we still have that $800 million asset. This will not utilize that faster or slower, kind of at the same pace. So, not only do we have this $10 billion asset, but we've got the $800 million asset for our tax credits. So, this does not cannibalize that tax asset at all. Understood. Thank you. Sure. Thanks, Mark. Thank you. Our next questions come from the line of Mike Zaremski with BMO Capital Markets. Please proceed with your questions. Morning, Gents. First question, slide 11 on the Adjusted EBITDA margin. It says 30% or greater. If I look at the appendix, I think it says it's removing historical stock-based comp. I don't think you all do that for your margin. So why are you removing stock-based comp? And just trying to get at, will this change Gallagher's perspective on EBITDA margin profile? Well, I think their stock-based comp and the historical numbers is different on the way they awarded equity for the way the PE firm awarded equity. So that's different than us on how we layer in our stock-based compensation. I think I answered your question, right? Yes. So will it change since it's different definitions then, will this deal change Gallagher's EBITDA margin profile materially? I guess, are we going to go to removing stock-based compensation for our calculations of EBITDA margin? I think is what your question is. Or, yeah, just trying to get a sense if this acquisition is going to change your perspective on margins going forward? I think here's the thing. They're the ones that removed the stock-based compensation from their EBITDA. We don't add that back in the log, but their stock-based compensation is different than ours because of the way they were owned by a PE firm. Okay, got it. And moving to, I don't see much on free cash flow in here. I understand that Assured probably had a lot of debt, but I guess just when all is said and done, a year or two from now, will this deal meaningfully change your free cash flow conversion profile just when we look at Gallagher's free cash flow divided by revenues? No, I think it's going to be a benefit to us. We get the deferred tax asset, so that alone is going to help us with our cash flow conversion profile, and I want to make sure we're clear on the stock-based compensation. The future EBITDA is depressed in this analysis by the new layering in of annual stock-based compensation awards, so I just want to make sure I'm answering your question the right way. We ignore theirs. We layer in ours. Okay. T hat's helpful. Lastly, if I just look at a high level about the integration costs, approximately $500 and the expense synergies of $100, just look at that ratio, $500 over $100. It's a much higher ratio than a lot of your peers who have done deals in the past. I think their cost savings ratios were more like the 2-3x range. So probably not apples to apples. I know there's some stock retention awards in here, but is there anything? Maybe there's some conservatism in here or anything you'd like to comment on the cost savings? Sure, I got that. Yeah, I got that. I think the metric you should be looking at is we think we're going to spend $250 million in order to save $100 million of cost probably is the way to do it. And I think, remember, this number is shown as if what we could accomplish in a year had they been a part of us starting last year on October 1st, 2023. I will say this. There are $2 billion of expenses and our $6 billion of expenses related to the like-for-like business. Maybe it's $5 billion. We've got $7 billion of expenses. Every day at Gallagher, you know that one of our strategic objectives is to be operationally excellent and improve our productivity and quality. When our combined teams, and they have some really smart folks that are doing this for themselves, come together, I think the journey over the next four or five years should naturally always take a look at that and assume that we can do it better, faster, and cheaper. But again, for purposes of this presentation, we're putting in a number that we think we could have achieved within a year-time run rate had we owned them on October 1st of 2023. So I think I answered your question there that I think the return on the investment is kind of a one-year snapshot, and I think there's more opportunities in the future, but that's not what that's not how you put together a historical pro forma. Yeah. Thanks and congrats. Thanks. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next questions come from the line of Gregory Peters with Raymond James. Please proceed with your questions. Morning, Greg. Good morning, everyone. Congratulations on your announcement. I guess I have a couple additional questions. First of all, in your synergies expectations, one of the things you didn't really talk about, at least in your comments, was using the offshore centers of excellence that you have. Is that part of your process? Yeah, there will be. I think that we have proven that we can service business. So we have 12,000 people in India. I'm sure we'll put them to use very well in helping improve the service offering that we can deliver through the AssuredPartners folks. So yes, it's of the $100 million, I'll call it a third that's in that assumption. I think that on any type of base business, we should be able to push $30 million-$40 million worth of effort into our offshore centers of excellence pretty easily on an annual run rate basis. Right now, Greg, they've got about 100 people or less offshored in that regard, and so we see a lot of opportunities to work together. That's a great follow-up answer, Pat, because that's where I was going to go. Then, I know you said this isn't really disruptive to your ongoing tuck-in acquisition pipeline, but maybe you can freshen up that comment with some additional details. There's a lot of if we go on your quarterly calls and your management meetings, you talk about this glorious pipeline. And just curious, because you're processing this transaction, how it might affect your attitude towards the pipeline as you look out 12 months? I think it's just as exciting as can be. I mean, we've got 50, 60 people that do this all day. We've looked at their pipeline and our pipeline. There's not that much overlap, which surprised me. Actually, when I looked at the data that was put together for this presentation and realized that 94% of their acquisitions we never even got to look at, these guys are pretty good. I mean, I can't believe they could get that many done without someone popping their head up and saying, "Hey, I wonder if Gallagher's interested." So they did a pretty good job in the marketplace. If you look at this way, Greg, we're doing something on the order of 50- 60 of these things a year. As you know, most of these are tuck-ins at less than $10 million in revenue. They fit right in. They've got a pipeline that is very similar. Most of it's sourced in the locations that they have in the field, which is a little different than ours, which I think is a good example for our people. And I think you add them together, could we maybe do 100 deals a year, 110? I think we could. And I think that's a real positive. So their pipeline added to our pipeline is excited. I've been on the quarters telling you that we've got $1 billion in motion. This is going to be very additive. Yeah. Think about it this way, Greg. If we're trying to, the two of us do 100, 120 deals a year between the two of us, there's 25,000 opportunities out there for us to knock on doors and say, "Would you like to be a part of our family and use our resources, our capabilities, all the tools you get overnight by joining Gallagher?" So I think our story is going to resonate more. I think that the opportunities are immense. So I think the two teams will come together, and I think that the way we're financing this, we're not going to be shutting down our acquisition pipeline to pay for this deal. We're going to continue going forward. I think it'll be significantly additive because when we're in the marketplace selling insurance, we've learned by using a Gallagher Drive, which you've seen, Mark, that people like to know people like me buy what, well, we're going to be out in the marketplace saying, "People like you sold to Gallagher. Call them. Call those folks that joined Gallagher six months ago. They'll tell you the good, the bad, and the ugly," and most of it's going to be really good because the tools that we're going to be able to provide, we're investing $300 million a year in making producers tougher. And to me, these guys have been fighting in the marketplace with bow and arrows, and we're going to give them howitzers and grenades. It's going to be a lot of fun. Thanks for the comment. I guess the last question is just, can you talk a little bit about the process, the bidding process? I guess the reason why I'm asking is, as just a couple of weeks ago, we were getting calls from PE shops that were actually looking at taking a slug of this company. And so I'm just curious how the process evolved and how it wound up with the opportunity you were able to get. Listen, I think that I'll plunge in on this. I think Pat has known Jim Henderson for a long time. We had an opportunity to compare notes last year, and we came pretty well excited. At one point, they decided that they might want to go down an IPO track. So it's for us to be able to come in. And then we just stayed close to the owners. So over the last six weeks, this came back on. We put 400 people into the process to do a confirming due diligence on it. There were no investment bankers between us, principals, the principals, which is similar. Being in the right place at the right time to seize on an opportunity when the sponsors wanted to have an exit and a transaction, we were there. This was very similar to when we bought the Australia and New Zealand operations, Wesfarmers. Our guy on the ground down there, Peter Searson, was close to the Wesfarmers people, knowing that they might spin that off, and we had an opportunity to come and look at that before they decided to go public. And more importantly, what was so great about that transaction is that when Steve Lockwood and his team looked at the choice of going public themselves or joining us as a strategic, he knew it was a better decision to join Gallagher as a strategic acquisition to immediately get our tools and resources and capabilities because it was better for his employees, and it was better for his customers. Fast forward to Pat's relationship with Dan Glaser when the Aon opportunity came up to buy the aviation business out of the JLT merger. That was there. You come to the Aon Willis that we were close to them on that transaction looking at the reinsurance. That fell apart initially. Tom Gallagher stayed close with the folks over at Willis. When that came up, we had the opportunity to do a principal-to-principal type deal. This is the fourth one of these. Just staying close, I got to give it to GTCR and the Apax folks that they came together, and we had a really open, transparent, wholesome opportunity to dig deep. 400 people in the data room and talking to their folks. The management team, highly energized and aligned with joining Gallagher, and we've had numerous, numerous meetings with them and dialogues. Open, transparent, right place, right time. Sometimes the ability to move provides an opportunity. I think the financial opportunity on this is spectacular. And so I got to give it to the team that they've pretty well ruined the last five weeks of their life in order to get this thing over the line. I'd also comment, Greg. No bid process, no bankers involved. I'll toot his horn. Not that he won't, but I mean, Doug did a very nice job, and I believe the people at GTCR are going to be very happy with their returns as well. And that was a dialogue from two very strong financial folks that knew how to make a deal. And on the selling side and the buying side, it's moved quickly and with an openness that has been outstanding. So we're very excited about it. I think Doug did a terrific job of working with his counterpart. Great. Thank you for the answers. Thanks, Greg. Thank you. Our next questions come from the line of David Motemaden with Evercore ISI. Please proceed with your questions. Morning, David. Hey, thanks. Good morning. Thanks. Pat, you had mentioned some of the benefits to organic growth from utilizing some of the systems and tools you guys have developed over the years. Could you just remind me how much organic growth has accelerated in your acquired businesses in year two and if you think that you can get the same sort of uplift in this deal as we look out to 2026 from implementing some of those tools? So David, it's hard for me to pull out a number for you on that. As you know, we report out our organic growth every quarter, and some of that is just subject to the vagaries of the market, up, down, sideways, as well as mix. So when we're heavy in property in Florida, for instance, and the wind blows, you can see, and is it fair to say that the Florida acquisition got a great organic growth because the rates in property troubled or D&O troubled and then halved? So it's difficult to say. What I'll say is this: the utilization of our tools by our merger partners has been outstanding. The receptiveness of looking at drive, which we now know statistically, sorry, if we utilize our drive capabilities, it takes our hit ratio up substantially. If we digitalize our relationship with a client, we know we get one full point of additional retention, and that's across merger partners and existing businesses. Now, remember, when you look back over merger partners over 10 years, we are a merger company. Similar to AssuredPartners, a lot of our growth has come from acquiring good people in the field. So while I can't give you a number that fits right into your question, I can tell you that 100% of the acquisition partners that we have done have embraced Core360, our Drive, our ability to submit digitally, and that that has improved their retention, the full point that we see, if not more, and has given their producers a lot more to sell in the field. And I hope that's a good enough answer. It's not as statistically accurate as you'd probably like, but it holds together. Yeah. Listen, I'll pile on one thing here. I got to say that they're pumping out 6% organic growth, and like Pat said, the tools and resources and armament that we can bring to them. Listen, this is a great growing franchise, both through tuck-in, through organic. Put our tools and capabilities. I don't see how we don't sell more new business. Put our service offering behind it. I don't see how we don't save more customers. So when you're talking about a company that's run 6% organic, all right, can we get an extra point from organic growth from our sales capabilities for new business? Sure. I would think that's a reasonable expectation. Can we save a point of lost business? Well, now all of a sudden, you've got two more points of organic growth. That's powerful. Now, none of that's baked into the pro formas that we've provided to you. We haven't done that, but that is the key to this combination. How are we going to be better together so that the folks that are there servicing our customers and competing in the field every day have a better shot of winning and a better shot of holding on to their customers? That's the strategy of this acquisition. Well, I'd layer it again on that, David, that the mantra we're using is how much better we're going to be together. We really honor their producer-centric culture as well. They do what we do. It starts with somebody calling someone and saying, "Hey, I'd like to get an appointment with you, and I'm here to tell you how to handle your risk management needs." And the second thing I'd comment on, and a reason I think that we'll have an uptake here, is that everyone knows that AssuredPartners for sale. And by the way, when they started the enterprise, Jim and the team were very clear that the opportunity here is to utilize private equity money, do a number of transactions, and over time, find a home. Well, they found their lifetime home. This is their last stop, and I think it's going to be exciting for them. Great. Thanks. No, that's helpful to see that. And yeah, we had sort of looked at the 6% organic over the last three years. It was a little bit below what you guys have been doing in brokerage. So it's good to hear some things you can do to accelerate that. The other question I had had is just on slide 16. It does look like there's some, you guys are obviously both large brokers, so have some overlapping geographies, particularly on the East Coast. How have you guys thought about revenue leakage from this? I know the retention you guys spoke about earlier, but just from a broader having the same end clients and some, how should we think about potential revenue leakage going forward? Zero. I have no breakage in this pro forma. I believe that their producers are going to love this deal, and I believe their clients are going to love this deal. And there isn't that much overlap. So when we did the due diligence, actually getting down to account levels, we're not looking at the account having to pick one of us. It just doesn't exist. And I think that when we put the two together, the argument's going to be so compelling that they're going to stay. Now, on top of that, as Doug mentioned, we've got $200 million set aside to make sure that their people also realize that they're looked at as part of the ongoing importance of the organization. You combine those two, and I don't think we're going to have any breakage. Yeah. One of the things too, just to amplify that, the maps that we put in on page 13, and I forget where else in the document, is on a regional basis. If you really were to microscope in on that, there's not a lot of overlap in cities. And if you get down into states like Iowa and Missouri, they're in certain cities. We're in certain cities. So there's not a lot, even though the map looks very similar on how it's spread across the region on a city basis, that there's just not a lot of overlap, which to us, I think, is a tremendous opportunity. Great. Thanks so much. Thanks, David. Thank you. Our next questions come from the line of Meyer Shields with KBW. Please proceed with your questions. Hello Meyer. Good morning and congratulations. Thank you. First question, just a simple question. Is the AssuredPartners brand going to persist or is that going away? That's going to go away. And if you think about the branding that we've done and the spend that we've made on our marketing efforts over the last number of years, I believe they're going to benefit from it extensively. Yeah. I think that the leverage on our branding efforts that we've been doing across the country and even globally, people now are going to say, "Wait a minute. I look up and I see that logo on that building. I see the logo on that sports team. I see the sponsorship of Special Olympics, that that's a Gallagher-sponsored organization." They're going to say, "Wow, that's our company," and they will get benefit. It brings us benefit not only from a client standpoint, but it also brings from a recruiting of employees standpoint and actually can help us attract more merger partners too. That overnight, I get to say that my company is a sponsor of X. It makes whatever sports team. I just don't. We've proven that over and over. When you look at how our sponsorship of the rugby league in the U.K. has really brought us brand recognition, and it is achieving three things for us. We can sell more business, we can hire more employees, and we can acquire more nice tuck-in acquisitions. So that's just one example of why a common brand has substantial value. Okay. That's very helpful. And second question, when you talk about the revenue synergies, just given the Gallagher strategy, does any of that manifest in risk management or is that all brokerage? We put that only as brokerage right now, but I think that when the producers at AssuredPartners realize how great we are at self-insurance, and they can see that their partner company in Gallagher Bassett can offer a terrific, terrific outcome for their claims business for self-insured folks, I think we'll see some opportunities there. Yeah. To add to that also, the synergies that we'll get from utilizing RPS in the United States. By the way, Assured is a very nice client of RPS presently, but there will be more opportunities there. London, we've got nothing built into this. They aren't huge users of the London market, but what they do will come to Gallagher. So there's going to be other things that are not in these pro forma numbers that are better working together. Okay, and last question, if I can. You talked about how this doesn't impede the ability to do tuck-in acquisitions. Is that even in the short term? Yes. I think that's in the short term. It does not in the short term. Correct. Just to make sure that we're. We're going to continue on. We announced acquisitions last week. Our team is focused and ready to go. Okay. Perfect. Thanks so much. Thanks, Meyer. Thank you. Our next question has come from the line of Mike Zaremski with BMO Capital Markets. Please proceed with your questions. Morning, Mike. Hey. Thanks for the follow-up. Quick one. So on the slide deck, slide 20, where you kind of break out the revenues, you show contingent revenues trailing 12-month basis, 7.9% of the revenue base. I think that's higher than you all and the peer group. Just curious, is there anything in the business mix that they just have a higher leaning towards contingent, and is that going to change over time? I think the issue there is I want to make sure, are you adding up contingent and supplementals when you're doing that math, or are you just looking at contingents? It's a good. I'm doing it off the top of my head, and I just see contingents. So I don't know. Yeah. I think you would want to add our supplementals and contingents and compare it to the line we call contingent revenue on page, let me pull up part of whatever that is, page 20. Sorry. Okay. All right. I can do all right. Sounds like nothing unusual. Actually, Mike, I think that our deals and what have you with the insurance companies they have will be accretive to them. I think they'll be increased, not decreased. Yeah. So the- I don't know what you want me to in front of me, but I think that when we did the due diligence, we realized that we do have stronger plans with certain carriers that they utilize. I think so. Okay. So that was part of the different numbers versus one, so. Okay. That's part of your commission rate adequacy comments, and lastly, on so investment income, their investment income ratio is just very low compared to peers, and I think that's why you're saying revenue synergies from kind of getting that 1% of revenue ratio up closer to you all. Am I thinking about that correctly? Yep. I think that's right. One of the things, if you go back, and it seems like yesterday, but it's probably 10 years ago, when we started going through a process of consolidating all of our cash accounts and getting them all on Kyriba, our common system, that's where they're going. And that was a common discussion about how we can free up cash balances and then we can invest them on a larger base. We were doing it at the time when there was no investment return, but that's paying good dividends for us now in order to have those all in the same system. They are on that journey themselves. We're going to be able to be better. We'll put that together on the same system. So I think there is. But what we put in the pro forma is a modest amount of uplift. All right. Thank you very much. Thanks, Mike. Thank you. Our next question has come from the line of Rob Cox with Goldman Sachs. Please proceed with your questions. Hello, Rob. Hey. Good morning. Thanks for the discussion on the organic growth. I just want to drill in a little bit on the net new business generation profile compared to Gallagher, perhaps historically, and kind of what you guys think you can do going forward? All right. So listen, I think one of the issues when there's systems that are spread out all over the place on it. I'll be honest, I'm not going to give any percentages. But when we talk to management, I think that they are very excited about being able to bring people together on one system so that opportunities can be quickly vetted, and we can go out and bring the right athletes to the point of sale together. So the answer to the question is the uplift in new business is about the opportunities to socialize opportunities quickly across all of AssuredPartners and Gallagher so that we come best prepared at the point of sale. That will lead to new business opportunities. And again, we're just trying to give at least one more point of new business on it. I think collaborative teamwork, sharing of opportunities, using the niche resources, again, getting that best athlete at the point of sale with the local athlete, I think is the combination of how they calculate their new business, how we calculate ours. We haven't harmonized that yet, so I'm a little hesitant to say, "We know they're running at X.X%, and we're running at this." But I can tell you on our management meetings, that is a big discussion point. I think adding on Doug's comment about the niches, their verticals, as I like to refer to them, and our verticals match up incredibly well. I think that we're a little bit more sophisticated and down the road in terms of organizing those. Their accounts and the talent that they've got handling those pieces of business in transportation, real estate, construction, not-for-profit, etc., the combination is going to be killer good. I think that will accelerate their ability to close and will accelerate the strength of our team. What I really like about it, let's say they have 12 great niches and we have 32, and there's some pretty good overlap. So let's say they have 100% overlap. What I'm really excited about is there's 20 niches that we have or verticals that we have that they don't. Their agents will be so much better at the point of sale by harnessing those other 20 verticals and niches that we have on that. So just think about that uplift by just having their folks having access to more niche expertise day one. As deals close, that is their—they have those resources on their computer. Every account of any size in the upper middle market over the last decade has been a team sale. The one-off man or woman that goes in and says, "I'm great. Give me your businesses," it's a dying breed, and they're used to that. They work that system very well. As Doug said, where they have good niche strength, he's exactly right. We're going to open up a whole level of a different expertise across niches across the whole country. Okay. Got it. Thank you very much. Seems like a lot more tools at Gallagher. And then I just had a follow-up. I did want to ask about the employee benefits business. Is that more brokerage or consulting? And could you kind of talk about the overlap with Gallagher there? Is that still focused on the middle market? It's pretty much middle market, and it's mostly brokerage, which, of course, we're very, very good at. But what we've learned about the benefits professionals, they need the tools that we have built to stay relevant in their local markets. And so what they're telling their P&C counterparts is, "A, we need to combine into a benefits professional team that is recognized nationally, not just locally." And, "B, we need these other resources that are being utilized by the Marshes, the Aons, and the Gallaghers to compete even in just the brokerage world." So here, again, we're going to bring a lot of resources. They've got great people, and it is primarily brokerage business, which we're also very, very good at. Thank you. Thanks, Rob. Thank you. Our last questions will come from the line of Andrew Kligerman with TD Securities. Please proceed with your questions. Hey. Thanks. Historically, AJ Gallagher has been pretty awesome at integrating. And when I look at the $160 million of EBITDA synergies, $100 million of it is expense synergies. I know you can't give me an exact number, but is that $100 million something that's very conservative? Do you have the potential to do more? How might you do more in expenses? All right. In this document, we wanted to portray what we could achieve in a short period of time had they been a part of us starting in October 1, 2023. We came up with that list of $100 million. There are some dis-synergies, and then when their folks come into our 401(k), they're going to get a bigger match. So we put that as an offset to some of the synergies. But by and large, if you go back again to my earlier comments, when they're together, we've got $6 billion or $7 billion or $8 billion of cost that we're spending. Gallagher has proven over time—just go back over the last five to seven years—that we have constantly improved margins because we constantly are getting more operationally excellent. We're improving our productivity. So, on the march together, our job is to wake up every day and say, "How do we do more? How do we get higher quality service, faster service at a lower cost?" That's what our middle and back office folks wake up every day and think about: better, faster, and cheaper. And as a result of that, the better is so important to support our producers. We better give them damn good service along the way. And every day, we wake up and try to do that. And that leads to some productivity and some cost savings opportunity also. But the important thing is to raise that quality and increase the speed of delivery. Got it. That was helpful. And then just sort of thinking about the producer profiles of AJ Gallagher and Assured, what's the average age of a producer at Assured versus the average age of a producer at AJ Gallagher? Andrew, I don't have an actual number on that for you, but I can tell you they look exactly like us. So our mix, when we looked at them, is literally identical. But I can't sit here and tell you it's 35 or 42. I don't have the number in front of me. Got it. Because that's kind of an important factor because I think—and correct me if I'm wrong, Pat—you attract a younger vintage of producers, people earlier in their career that can really make hay with a long career span. Yeah. I think you're right about that. We are very, very good and very strong, as you know, in developing interns. Last summer, we had 500 young people in the United States. I would hope that in a short time, this would take that up another couple hundred young people. But they have been good as well at keeping a pipeline. They're very good recruiters. They do it at a local level. They don't have the national approach to an internship, but they do support financially the recruiting of good young talent. So we looked at the profile, and we think that it's a very strong profile match. Got it. Thank you. Thank you, Andrew. Well, thank you, everybody, for joining us this morning. We're out of time, and we'd like to thank you for spending time early in the morning with us. As you could probably tell from listening to Doug and I, we're very, very excited. I want to thank Jim Henderson, Randy Larsen, Mark Cassen, Sean, and all the rest of the team at AssuredPartners for choosing Gallagher. As I say every quarter and every chance I get, these people all have choices, and we're extremely excited about this deal. So thanks for being with us this morning. We appreciate it. Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.