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Marsh Acquires Progressive Benefit

MMC AON

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Marsh & McLennan Agency LLC (“MMA”), a wing of Marsh & McLennan Companies, Inc. (MMC - Analyst Report), announced the acquisition of North Carolina-based employee-benefit oriented services provider Progressive Benefit Solutions (“PBS”). The financials and other terms of the deal remained undisclosed.

Following the deal, PBS will function as a part of Rutherfoord, a wing of MMA to extend the capabilities and resources of employee benefits in Raleigh. Following the closure of the deal, PBS will continue to operate from its existing office located in Raleigh.

With the acquisition of PBS, Marsh & Mclennan is expected to expand its customer base, which will be accretive to its top line in the upcoming quarters. The company has always been on the look out for strategic and profitable acquisitions. The recent acquisition marks its fourth acquisition over the last six months.

The recent acquisition is close on the heels of Marsh’s launch of CloudProtect, an innovative solution to mitigate the risk associated with cloud computing. The recent initiatives undertaken by Marsh & McLennan to grow organically as well as inorganically are reflected in the company’s increasing stock price. A stable rating affirmation by Fitch Ratings further adds to the positives.

The company should be wary of the fact that a proactive stance on the acquisition front has also been adopted by its competitors including Aon Corporation (AON - Analyst Report). Aon Affinity, an operational division of Aon Risk Solutions, recently completed the acquisition of Access Plans for a cash payment of $70.1 million. This merger is slated to increase the company’s customer-base for protection benefits and retail services by over a million in the United States and Canada.

Marsh & McLennan currently retains a quantitative Zacks #3 Rank, which translates into a short-term Hold rating. We also maintain a long term Neutral recommendation on the stock.

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