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Arthur J. Gallagher Expands in Australia With P2 Group Buyout

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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired P2 Group in its effort to grow outside the United States.  The terms of the transaction have not been revealed.

Hawthorn, Victoria-based P2 Group was founded in 2003. The company helps employers manage occupational health and lower the risk of worker injuries and WorkCover claims. Addition of P2 Group to Arthur J. Gallagher’s portfolio will help boost its retail brokerage division's Workplace Risk Practice's footprint as well as consolidate its presence in Victoria. The acquisition will also enhance cross-selling opportunities for the acquirer.

Arthur J. Gallagher is one of the top five global brokers. The company’s revenues are geographically diversified with strong domestic and international operations. Over some time, the company has been actively pursuing acquisitions outside the United States to grow its international operations.  

In the first quarter of 2019, international operations across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom generated 26% of the revenues. Given the number and size of its non-U.S. acquisitions, the Zacks Rank #3 (Hold) insurance broker expects international contribution to total revenues to increase. Its recent acquisitions have helped it expand in New Zealand, Australia and United Kingdom.

Arthur J. Gallagher remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.

Shares of Arthur J. Gallagher have gained 10.5% quarter to date, in line with the industry’s rise The company’s policy to ramp up its growth profile and capital position should continue to drive share price higher.



There have been a host of acquisitions in the insurance space of late given the significant capital available. Brown & Brown of Kentucky, Inc., a subsidiary of Brown & Brown, Inc. (BRO - Free Report) , acquired United Development Systems, Inc. The Hartford Financial Services Group, Inc. (HIG - Free Report) acquired The Navigators Group, Inc.

A Stock to Consider

A better-ranked insurer is eHealth, Inc. (EHTH - Free Report) , sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

eHealth provides private health insurance exchange services to individuals, families, and small businesses in the United States and China. The company delivered positive earnings surprise of 512.20% in the last reported quarter.   

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