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Funds News

Blackstone to buy brokerage Alliant Insurance

(Adds details, byline)

NEW YORK, June 3 (Reuters) - The Blackstone Group [BG.UL] struck a deal to buy its first insurance brokerage firm, saying on Sunday it will purchase privately held Alliant Insurance Services Inc.

Terms of the deal were not disclosed, but a source close to the process said Blackstone will pay $1.2 billion.

Blackstone is buying Alliant from private equity firm Lindsay Goldberg. The deal comes nine months after Alliant announced plans to buy the U.S. operations of London-based Jardine Lloyd Thompson Group Plc JLT.L for $100 million.

For Blackstone, which typically pursues companies worth tens of billions of dollars, the Alliant buyout is a small transaction. But the firm said the company offers a nice “platform,” suggesting it would roll more insurance brokerages into the business.

“Alliant is an attractive platform due to its market leadership in its core segments (and) superior growth prospects,” Blackstone’s Senior Managing Director Chinh Chu said in a statement.

The insurance brokerage market is fragmented, with small, medium and large companies spread throughout the United States.

Two similar deals have occurred this year in the sector. Apax Partners and Morgan Stanley agreed to buy Chicago-based broker Hub International Ltd HBG.N and two months earlier, Goldman Sachs' GS.N private-equity group said it would pay $1.4 billion to acquire USI Holdings Corp. Alliant says it is one of the largest U.S. insurance brokerage operations, providing insurance and employee benefits products to more than 20,000 commercial clients nationwide. Alliant distributes specialty-oriented products to public entities, law firms, real estate and other industry groups.

(Additional reporting by Steve James)

((Reporting by Michael Flaherty, editing by Tim Dobbyn; email michael.flaherty@reuters.com; +1 646-223-6152))

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