In a conference call, Andrew L. Rogal, chairman and chief executive officer of HRH, said the acquisition would allow the broker to enter new markets serving upper middle-market and top-tier clients, which HRH defines as companies generating $50,000 in commission and fee revenue.

To make the deal work, HRH said it would pay a combination of cash and stock that could be worth $244 million. Completion of the deal is expected by July 1.

As part of the deal, HRH will assume $55 million in debt. Part of the payment is based on Hobbs attaining certain financial performance goals over the next two years, which HRH executives said they "would be very surprised" if Hobbs did not meet.

For 2001, Hobbs reported revenues of $95.2 million, and HRH said it expects "strong organic growth in 2002 and beyond."

Timothy J. Korman, HRH's executive vice president, finance and administration, said Hobbs is the 17^th largest insurance broker in the country, with $1.7 billion in insurance premium service. The firm provides property-casualty insurance services, risk management, executive compensation and employee benefits services. Besides bringing new markets to HRH, the deal would also add employee and executive benefit services to its portfolio.

Mr. Rogal said the acquisition, which is part of the firm's five-year acquisition strategy, allows the broker to enter markets more quickly than if it tried building the business.

Martin L. Vaughn III, HRH's president and chief operating officer, said Hobbs opens the door to new lines, and of special interest is their executive benefit deferred compensation program. He called it a rapid growth area for the firm.

There are no consolidations being contemplated in the near term, Mr. Rogal said. He said Thomas A. Golub will remain president and chief executive officer of Hobbs. Mr. Golub will join HRH as executive vice president and serve on the firm's board of directors, becoming a partner in the firm, Mr. Rogal said.

The acquisition will not interrupt HRH's acquisition strategy or require the firm to make a secondary stock offering to complete the deal, Mr. Rogal said. Mr. Vaughn added that the firm is in a position to continue to make acquisitions and pay off the debt it is assuming.

"We are not out of the acquisition game," Mr. Rogal said.