Itasca, Ill.-based Arthur J. Gallagher (NYSE:AJG) has a new subsidiary today.

On Tuesday, Gallagher announced that it has acquired Bollinger, for $172 million cash plus 3.2 million Gallagher shares. Gallagher, which specializes in retail property and casualty insurance placement, wholesale brokerage and program management, employee benefits brokerage, and consultancy, boasts 500 employees operating out of eight offices in New Jersey, New York, Pennsylvania, and Connecticut, and is the nation's 21st largest insurance broker.

Announcing the acquisition, Gallagher CEO J. Patrick Gallagher Jr. said. "The Bollinger acquisition gives us a unique opportunity to significantly expand our Northeastern operating platform and market presence in three of our core businesses." He called the deal "the perfect fit for our clients and employees."

Gallagher anticipates that Bollinger will generate $100 million in incremental revenue for the company annually and will be profitable for the company, even accounting for integration costs. Investors seem to agree, bidding up Gallagher shares by 1.5% in Tuesday trading to close at $44.38.