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Marsh & McLennan to Buy Jardine Lloyd for Portfolio Boost
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Marsh & McLennan Companies, Inc. (MMC - Free Report) recently announced its agreement to purchase Jardine Lloyd Thompson Group plc for boosting capabilities as well as accelerating its growth profile. The deal has been approved by the Board of Directors of both companies. Marsh & McLennan would fund this transaction through cash in hand as well as proceeds from debt financing.
Per the terms of the acquisition, holders of Jardine Lloyd Thompson’s (“JLT”) common shares will receive a cash consideration of £19.15 pounds per share. Total cash consideration came in at $5.6 billion, or an estimated enterprise value of $6.4 billion.
JLT provides risk and insurance broking advice to energy, mining, healthcare, construction, marine and aerospace sectors as well as in financial lines, political risk and trade credit. It currently operates across 40 countries. The to-be-acquired company’s impressive profile with significant organic growth and demographic diversification will surely enable the acquirer to boost its portfolio.
With this acquisition, Marsh & McLennan expects to create a convincing value proposition to its clients and shareholders. Also, the buyout is likely to strengthen the company’s strategy to emerge as the distinguished global firm in areas of risk, people and strategies.
Annual cost synergies of nearly $250 million are projected to be realized from this deal over the next three years. Moreover, this deal is anticipated to be immediately accretive to the acquiring company’s adjusted cash EPS and produce a double-digit internal rate of return.
Marsh and McLennan’s effort to expand in higher growth and higher margin sectors has been strongly evident from its string of earlier buyouts. Last month, the company announced that it will acquire the investment consulting, alternatives consulting and wealth management operations of Pavilion Financial Corporation to complement its current investment consulting, alternatives and wealth management offerings. Moreover, the parent company's unit Mercer has also signed an agreement to purchase Summit Strategies Group to fortify its growth profile and enhance the service portfolio.
Shares of this Zack Rank #3 (Hold) company have gained 2.5% in a year’s time, underperforming its industry’s rally of nearly 5.6%.
Stocks to Consider
Investors interested in the insurance industry might take a look at a few better-ranked stocks like The Navigators Group, Inc. , Alleghany Corporation and First American Financial Corporation (FAF - Free Report) .
Navigators Group underwrites marine, property and casualty plus professional liability insurance products and services in the United States as well as globally. The company sports a Zacks Rank #1 (Strong Buy) and managed to deliver positive results in three of the trailing four quarters with an average four-quarter positive surprise of 19.54%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Operating in the Reinsurance and Insurance segments, Alleghany Corporation offers related services in the United States as well as internationally. The company came up with an average three-quarter earnings surprise of 17.61%. The stock has a Zacks Rank of 1.
First American Financial and its subsidiaries provide financial services to its customers. It carries a Zacks Rank #2 (Buy) and pulled off an average four-quarter beat of 8.22%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Marsh & McLennan to Buy Jardine Lloyd for Portfolio Boost
Marsh & McLennan Companies, Inc. (MMC - Free Report) recently announced its agreement to purchase Jardine Lloyd Thompson Group plc for boosting capabilities as well as accelerating its growth profile. The deal has been approved by the Board of Directors of both companies. Marsh & McLennan would fund this transaction through cash in hand as well as proceeds from debt financing.
Per the terms of the acquisition, holders of Jardine Lloyd Thompson’s (“JLT”) common shares will receive a cash consideration of £19.15 pounds per share. Total cash consideration came in at $5.6 billion, or an estimated enterprise value of $6.4 billion.
JLT provides risk and insurance broking advice to energy, mining, healthcare, construction, marine and aerospace sectors as well as in financial lines, political risk and trade credit. It currently operates across 40 countries. The to-be-acquired company’s impressive profile with significant organic growth and demographic diversification will surely enable the acquirer to boost its portfolio.
With this acquisition, Marsh & McLennan expects to create a convincing value proposition to its clients and shareholders. Also, the buyout is likely to strengthen the company’s strategy to emerge as the distinguished global firm in areas of risk, people and strategies.
Annual cost synergies of nearly $250 million are projected to be realized from this deal over the next three years. Moreover, this deal is anticipated to be immediately accretive to the acquiring company’s adjusted cash EPS and produce a double-digit internal rate of return.
Marsh and McLennan’s effort to expand in higher growth and higher margin sectors has been strongly evident from its string of earlier buyouts. Last month, the company announced that it will acquire the investment consulting, alternatives consulting and wealth management operations of Pavilion Financial Corporation to complement its current investment consulting, alternatives and wealth management offerings. Moreover, the parent company's unit Mercer has also signed an agreement to purchase Summit Strategies Group to fortify its growth profile and enhance the service portfolio.
Shares of this Zack Rank #3 (Hold) company have gained 2.5% in a year’s time, underperforming its industry’s rally of nearly 5.6%.
Stocks to Consider
Investors interested in the insurance industry might take a look at a few better-ranked stocks like The Navigators Group, Inc. , Alleghany Corporation and First American Financial Corporation (FAF - Free Report) .
Navigators Group underwrites marine, property and casualty plus professional liability insurance products and services in the United States as well as globally. The company sports a Zacks Rank #1 (Strong Buy) and managed to deliver positive results in three of the trailing four quarters with an average four-quarter positive surprise of 19.54%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Operating in the Reinsurance and Insurance segments, Alleghany Corporation offers related services in the United States as well as internationally. The company came up with an average three-quarter earnings surprise of 17.61%. The stock has a Zacks Rank of 1.
First American Financial and its subsidiaries provide financial services to its customers. It carries a Zacks Rank #2 (Buy) and pulled off an average four-quarter beat of 8.22%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>