The brokerage said the transaction is expected to be made final in the first quarter of this year. U.S.I. also said terms are subject to negotiation and it is not disclosing execution of definitive agreements and other customary closing conditions.

Patterson Smith was founded in 1961 and U.S.I. described it as one of the largest independently owned insurance brokerage firms in the Washington, D.C. metropolitan area. The company has a diversified revenue mix with approximately 65 percent of revenues derived from property-casualty and 35 percent from employee benefits.

The combination with Patterson Smith's operation will create one of the largest middle-market brokers in the Washington, D.C. metropolitan area, U.S.I. said.

David L. Eslick, chairman, president and chief executive officer of U.S.I., said the purchase will bring additional benefits and expertise to U.S.I.'s Washington, D.C. operation "that is currently mostly focused on property and casualty. We are extremely pleased with the professional level of their management and production team, which will provide additional talent to our current operations."

Frank J. Patterson, president and CEO of Patterson Smith, added, "Aligning with U.S.I. would increase our ability to serve our customers through enhanced product and service capabilities."

U.S.I. Holdings Corp., founded in 1994, is a distributor of insurance and financial products and services to businesses throughout the United States. U.S.I. operates out of 63 offices in 19 states.