Back to top

Image: Bigstock

Brown & Brown (BRO) to Foray Into Ireland With O'Leary Insurances

Read MoreHide Full Article

Brown & Brown, Inc. (BRO - Free Report) has inked an agreement to buy the general insurance operating companies of O’Leary Insurances. The transaction, pending closing conditions, is expected to close in January 2021.

Founded in 1961, O’Leary Insurances evolved to be Ireland’s largest independently owned brokerage. The company caters to commercial and personal insurance requirements throughout Ireland and abroad.

Thus, the addition of O’Leary Insurances to the acquirer’s portfolio will help it penetrate into Ireland. O’Leary Insurances stands to benefit from Brown & Brown’s expertise in serving the Irish market with enhanced products as well as services. Brown & Brown’s solid earnings have allowed the company to expand its capabilities and buyouts have extended geographic footprint.

Brown & Brown, along with its subsidiaries, continuously makes strategic acquisitions to expand international presence, add capabilities and boost portfolio. These, in turn, help Brown & Brown ramp up its commissions and fees, which, in turn, drive revenues.

The company recently closed the seventh buyout in the ongoing quarter. During the nine months ended Jun 30, 2020, it closed 16 transactions, which resulted in estimated annual revenues of $116 million.

Brown and Brown remains well poised to benefit from its capital structure and has been able to access sufficient capital via $1.1-billion available cash to fund growth. Moreover, consistent operational results have helped Brown & Brown generate solid cash flows to be deployed in strategic initiatives.

Shares of the company have rallied 16.5% year to date compared with the industry’s 4.7% increase. We expect this Zacks Rank #2 (Buy) insurance broker’s sustained operational performance, higher commissions and fees, along with a sturdy capital position to help it retain the momentum.

There have been a number of significant acquisitions in the insurance domain of late. Recently, Arthur J. Gallagher & Co. (AJG - Free Report) acquired Premier Brokerage Services to boost its life brokerage capabilities in the high-end agent and advisory space. 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.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>