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Arthur J. Gallagher (AJG) Announces Premier Brokerage Buyout

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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired Premier Brokerage Services. The terms of the transaction have not been revealed yet.

Jenkintown, PA-based Premier Brokerage Services, founded in 1995, caters to clients across the United States. It has about 80% business concentrated in the East Coast. This high net-worth focused life insurance wholesale agency largely provides permanent and term life insurance, annuities and long-term care products. Addition of Premier Brokerage Services will thus boost the acquirer’s life brokerage capabilities in the high-end agent and advisory space.

This marks the company’s seventh buyout to date in the fourth quarter. In the fourth quarter of 2019, the company closed 11 acquisitions with estimated annualized revenues of $117 million. Its merger and acquisition pipeline is quite strong with about $350 million revenues associated with nearly 40 term sheets either agreed upon or being prepared.

A strong capital position supports Arthur J. Gallagher in its growth endeavors. The company targets about $1.5-$1.6 billion of mergers and acquisitions with free cash and debt.

This Zacks Rank #3 (Hold) insurance broker remains focused on long-term growth strategies for delivering organic revenue improvement, apart from making strategic mergers and acquisitions. It is also focused on productivity improvements and quality enhancements that should help it deliver sustained operational excellence.

Shares of Arthur J. Gallagher have gained 29.2% year to date compared with the industry’s 3.5% increase. Efforts 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 significant capital availability. Brown & Brown’s (BRO - Free Report) subsidiary, Hull & Company, LLC acquired assets of South & Western and all issued and outstanding shares of its affiliate, S&W Premium Finance Company, Inc. Assurant (AIZ - Free Report) acquired HYLA Mobile in an effort to consolidate its position as a leader in trade-in and upgrade programs. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (MMA) recently acquired the independent agency, INSPRO in Nebraska.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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