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Arthur J. Gallagher (AJG) Boosts Employee Benefits Consulting
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Arthur J. Gallagher & Co. (AJG - Free Report) has acquired The Robbi Davis Agency, Inc. The terms of the transaction have not been disclosed.
Little Rock, AR-based The Robbi Davis Agency, founded in 1996, is a traditional health & welfare agency. This company, specializing in employee benefits, Medicare supplement/drug plans and individual health insurance, largely focuses on small group businesses. Thus, the addition will help the acquirer strengthen employee benefits consulting operations.
Arthur J. Gallagher boasts an impressive inorganic story. The recent buyout marks the 14th acquisition by the company quarter to date, compared with 10 buyouts in the fourth quarter of 2020 (with estimated annualized revenues of $100.2 million). The acquirer’s merger and acquisition pipeline is quite strong with about $400 million revenues associated with nearly 50 term sheets either agreed upon or being prepared. Arthur J. Gallagher has $190 million in estimated annual acquired revenues from acquisitions made this year to date.
Arthur J. Gallagher’s revenues are geographically diversified with strong domestic and international operations and a compelling product and service portfolio. Revenue growth rates have generally been 5-15% for 2021 acquisitions to date.
A solid capital position supports AJG in its growth initiatives. This Zacks Rank #3 (Hold) insurance broker estimates more than $2.5 billion of mergers and acquisitions, consisting of $1 billion in cash and about $650 million of net cash generation in the second half of 2021, and $600 million to $700 million of borrowing capacity. Thus, Arthur J. Gallagher remains focused on continuing its tuck-in mergers and acquisitions.
Arthur J. Gallagher remains focused on long-term growth strategies for delivering organic revenue improvement and pursuing strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Given the insurance industry’s adequate capital level, players like Athene Holdings , Brown and Brown Inc. (BRO - Free Report) , and Marsh & McLennan Companies (MMC - Free Report) are pursuing strategic mergers and acquisitions.
Athene and Apollo Global have agreed to buy a majority interest in Aqua Finance to boost Apollo’s $80 billion annual run-rate of asset origination across commercial and consumer lending platforms. Athene boasts an impressive inorganic growth, which has been driven by several buyouts and block reinsurance transactions with several companies. ATH expects its inorganic growth channel to continue to be an important driver in the future.
Brown and Brown acquired Heacock Insurance to boost its presence in central Florida. Brown & Brown intends to make consistent investments in boosting organic growth and margin expansion. BRO’s solid earnings have allowed it to expand its capabilities, with the buyouts extending its geographic footprint.
Marsh & McLennan’s unit Marsh McLennan Agency acquired InSource Insurance Group to leverage InSource’s know-how in the oil and gas industry and enhance capabilities. Marsh & McLennan has made numerous purchases within its different operating units that enabled it to enter new geographies, expand within the existing locations, foray into new businesses, develop new segments and specialize within its current businesses.
Shares of Arthur J. Gallagher have gained 37.1% year to date compared with the industry’s 25.9% increase. Its efforts to ramp up its growth profile and capital position should continue to drive the share price higher.
Image Source: Zacks Investment Research
Shares of Athene, Brown and Brown and Marsh & McLennan have gained 85.4%, 41.7% and 46.8%, respectively, in the same time frame.
Image: Bigstock
Arthur J. Gallagher (AJG) Boosts Employee Benefits Consulting
Arthur J. Gallagher & Co. (AJG - Free Report) has acquired The Robbi Davis Agency, Inc. The terms of the transaction have not been disclosed.
Little Rock, AR-based The Robbi Davis Agency, founded in 1996, is a traditional health & welfare agency. This company, specializing in employee benefits, Medicare supplement/drug plans and individual health insurance, largely focuses on small group businesses. Thus, the addition will help the acquirer strengthen employee benefits consulting operations.
Arthur J. Gallagher boasts an impressive inorganic story. The recent buyout marks the 14th acquisition by the company quarter to date, compared with 10 buyouts in the fourth quarter of 2020 (with estimated annualized revenues of $100.2 million). The acquirer’s merger and acquisition pipeline is quite strong with about $400 million revenues associated with nearly 50 term sheets either agreed upon or being prepared. Arthur J. Gallagher has $190 million in estimated annual acquired revenues from acquisitions made this year to date.
Arthur J. Gallagher’s revenues are geographically diversified with strong domestic and international operations and a compelling product and service portfolio. Revenue growth rates have generally been 5-15% for 2021 acquisitions to date.
A solid capital position supports AJG in its growth initiatives. This Zacks Rank #3 (Hold) insurance broker estimates more than $2.5 billion of mergers and acquisitions, consisting of $1 billion in cash and about $650 million of net cash generation in the second half of 2021, and $600 million to $700 million of borrowing capacity. Thus, Arthur J. Gallagher remains focused on continuing its tuck-in mergers and acquisitions.
Arthur J. Gallagher remains focused on long-term growth strategies for delivering organic revenue improvement and pursuing strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Given the insurance industry’s adequate capital level, players like Athene Holdings , Brown and Brown Inc. (BRO - Free Report) , and Marsh & McLennan Companies (MMC - Free Report) are pursuing strategic mergers and acquisitions.
Athene and Apollo Global have agreed to buy a majority interest in Aqua Finance to boost Apollo’s $80 billion annual run-rate of asset origination across commercial and consumer lending platforms. Athene boasts an impressive inorganic growth, which has been driven by several buyouts and block reinsurance transactions with several companies. ATH expects its inorganic growth channel to continue to be an important driver in the future.
Brown and Brown acquired Heacock Insurance to boost its presence in central Florida. Brown & Brown intends to make consistent investments in boosting organic growth and margin expansion. BRO’s solid earnings have allowed it to expand its capabilities, with the buyouts extending its geographic footprint.
Marsh & McLennan’s unit Marsh McLennan Agency acquired InSource Insurance Group to leverage InSource’s know-how in the oil and gas industry and enhance capabilities. Marsh & McLennan has made numerous purchases within its different operating units that enabled it to enter new geographies, expand within the existing locations, foray into new businesses, develop new segments and specialize within its current businesses.
Shares of Arthur J. Gallagher have gained 37.1% year to date compared with the industry’s 25.9% increase. Its efforts to ramp up its growth profile and capital position should continue to drive the share price higher.
Shares of Athene, Brown and Brown and Marsh & McLennan have gained 85.4%, 41.7% and 46.8%, respectively, in the same time frame.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.