Back to top

Analyst Blog

Brown & Brown Inc. (BRO - Snapshot Report) culminated the acquisition of Beecher Carlson Holdings Inc. (“Beecher Carlson”) from Austin Ventures, FSPM and a group of individual employee and non-employee equity holders yesterday. The deal was announced in May 2013 and was pending regulatory approval. The total net purchase consideration equates to $336.5 million.

As per the deal, Beecher Carlson’s middle-market retail facilities in Oregon, Arizona and Mississippi. will be merged with Brown & Brown Retail Division. Also, the OnPoint programs will be added to Brown & Brown National Programs Division. Its account division in Atlanta, Georgia will however encounter no change.

Beecher Carlson is an insurance and risk management broker that provides services like retail brokerage, program management and captive management Brown & Brown being an insurance, reinsurance and risk management provider, the acquisition of Beecher Carlson is expected to strengthen the former’s business by exposing it to new opportunities, enhanced resources and strong leadership.

Brown & Brown is positioning itself to tap the opportunities from a growing insurance market. Towards this end the company acquired some assets of The Rollins Agency Inc. in Jun 2013. The deal is also expected to enhance the risk management capabilities of the company and at the same time increase the clientele base of the company.

For the three months ending Mar 31, 2013, Brown & Brown’s revenues were $335 million, up 10.8% year over year. These acquisitions are expected to augment the numbers further.

Acquisition activities are common in the insurance industry. Companies engage in such endeavors in order to widen their geographic presence, expand clientele base and gain on revenues. Among industry majors who engaged in acquisition activities in the last two months, Arthur J. Gallagher & Co. (AJG - Snapshot Report) and Marsh & McLennan Companies Inc. (MMC - Analyst Report) are some renowned names.

In May 2013, Arthur J. Gallagher entered into an agreement to acquire Texas-based Garza Long Group (“GLG”) while in Jun 2013, Marsh & McLennan announced the acquisition of Dominican Republic based Franco & Acra Tecniseguros.

Brown & Brown currently carries a Zacks Rank #3 (Hold). Among others in the industry, Willis Group Holdings Public Limited Company (WSH - Analyst Report) carries a favorable Zacks Rank #2 (Buy) and is worth considering.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%