Minneapolis-based Hays Cos., a business insurance and employee benefits brokerage, has agreed to be acquired for $705 million by Brown & Brown, a publicly held insurance firm based in Daytona Beach, Fla.

The deal for low-profile Hays is one of the largest acquisitions of a Minnesota firm this year.

Hays was started in 1994 by CEO Jim Hays, who left a national brokerage to start his own company. It has grown to be the largest independent broker of business insurance and employee benefits in the Upper Midwest.

Brown & Brown, with a market value of $8 billion, will pay $605 million in cash, $100 million in stock and up to another $25 million in cash if Hays achieves certain operating-profit growth targets over three years, according to a filing with the Securities and Exchange Commission Monday.

Hays has grown to No. 22 on Business Insurance magazine's list of the 100 largest brokers in the United States. It expects revenue this year of about $210 million from risk-management consulting, insurance and employee-benefits sales in 21 states.

CEO Hays, 61, the single-largest stockholder, said about 75 other employee-owners will benefit from the transaction.

"After 24 years as an independent insurance broker, we feel the time is now to partner with an industry leader who shares our cultural values," Hays said, acknowledging continuing consolidation in the insurance trade. "Brown & Brown has the same client-focused attitude that our clients have come to expect. This partnership enhances our ability to provide expanded solutions for our clients and new opportunities for our employees."

The Hays operation will continue to be led by Hays, and President Mike Egan. It will operate as a region inside Brown & Brown's retail division.

"We are growing faster than our industry average," Hays said Monday, anticipating no job losses as a result of the deal.

Following completion of the transaction, expected in November, Hays also will join Brown & Brown as vice chairman of the board of directors.

Hays grew up in north Minneapolis, graduated from Patrick Henry High School and earned undergraduate and MBA degrees from the University of Minnesota.

He passed on a job offer in finance from Northwest Airlines to enter the business insurance brokerage industry and a job better suited to his hard-charging, sales-oriented personality.

By the early 1990s, he led the Minneapolis office of Chicago-based Aon Corp., an international brokerage.

In 1994, Hays and five others started Hays Cos. with $300,000 of their own money. They built it into the largest Minnesota-based insurance broker, with 700-plus employees.

Terry Larkin, a retired insurance consultant and admirer, once called Hays a very competitive hard-charger "in a sharp-elbowed business."

Hays, married and the father of three adult children, maintains homes in the Twin Cities and Miami.