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Arthur J. Gallagher (AJG) Inks Deal to Buy Bollington Wilson

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Arthur J. Gallagher & Co. (AJG - Free Report) has inked a deal to acquire specialist UK insurance broker, The Bollington Wilson Group (Bollington). The acquisition is expected to be completed following the fulfilment of regulatory approval.

Sale-based Bollington Wilson Group, founded in 1973, has well-established divisions in SME, micro-SME and personal lines. The Bollington Wilson Group was recently formed following the merger of two leading North West brokers, Bollington Insurance Brokers and Wilsons Insurance Brokers.

Presently, The Bollington Wilson Group is one of UK’s leading independent insurance brokers and it successfully operates from six offices and employs in excess of 400 people across the Group. Operating on a nationwide basis, The Group now places in excess of £130 million annual gross written premium, operates over 40 delegated authority schemes and boasts 140,000 strong client base across the UK.

With the ability to offer competitive insurance solutions to a wide range of business clients and private individuals, these include insurances for small and large businesses, motor traders, charities & care organizations, and individuals requiring personal lines insurance covers.

Addition of Bollington will boost the acquirer’s organic sales, mergers and acquisitions activities. The acquisition will also provide Arthur J. Gallagher with additional scale in the regional commercial broking sector. Moreover, Bollington’s strong business capability and compelling portfolio of specialisms will enhance Arthur J. Gallagher’s existing business lines.

Inorganic Growth Story

Acquisitions enable this Zacks Rank #3 (Hold) insurance broker to expand into desirable geographic locations, extend its presence in retail and wholesale insurance and reinsurance brokerage services markets, and increase the volume of general services currently provided. Its inorganic pipeline remains strong, with revenues of about $350 million associated with 40 term sheets either agreed upon or being prepared.

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

Last year, the insurance broker closed 26 buyouts and has made two acquisitions as of now this year. Revenue growth rates have generally been 2.5-15% for 2020 acquisitions. The buyouts provide the company with incremental capabilities and services to assist clients across Australia, the U.K., Europe and the United States. The company remains focused on its long-term growth strategies of delivering organic revenue growth, and pursuing mergers and acquisitions.

Other Acquisitions in the Same Space

There have been a host of acquisitions in the insurance space of late, given significant capital availability. Assurant (AIZ - Free Report) acquired EPG Insurance to consolidate its presence in the automotive service contract space. Brown & Brown, Inc.’s (BRO - Free Report) subsidiary Brown & Brown Dealer Services acquired considerably all ADM Marketing Group, Inc. and its affiliate ADM Insurance Services, Ltd. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (MMA) recently acquired independent agency, INSPRO in Nebraska.

Price Performance

Shares of Arthur J. Gallagher have gained 24.7% in a year, outperforming the industry’s increase of 1.3%. Efforts to ramp up the company’s growth profile and capital position should help shares gain further.

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