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Arthur J. Gallagher (AJG) Boosts Capabilities With TCS Buyout

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Arthur J. Gallagher & Co.’s (AJG - Free Report) risk management services subsidiary, Gallagher Bassett Services, has purchased Terrier Claims Services, Inc. (TCS) and its affiliate, MT Investigations, LLC. The terms of the transaction have not been revealed yet.

Pleasantville, NY-based Terrier Claims Services, founded in 1996, is a full-service claims investigation firm. It only caters to clients from insurance defense, third-party administrators, defense attorneys and government agencies.

Terrier Claims Services undertakes elaborate field investigations, trial preparation and property adjusting services in New York, New Jersey, Pennsylvania and Connecticut apart from nationwide desktop investigations. Thus, its addition to the acquirer’s portfolio will boost field investigative and property adjusting capabilities, particularly with complex construction claims.

Arthur J. Gallagher boasts an impressive inorganic growth story with prudent buyouts. While this marks the first buyout in the second quarter of 2021, this Zacks Rank #3 (Hold) insurance broker has made six acquisitions in the first quarter. The company’s merger and acquisition pipeline is quite strong with about $300 million of revenues, associated with about 30 term sheets either agreed upon or being prepared. The company expects a very active 2021.

A strong capital position enables Arthur J. Gallagher to engage in strategic initiatives that position it for growth. The company targets about $2.5 billion of mergers and acquisitions with free cash and debt in 2021.

Arthur J. Gallagher 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 2.3% year to date compared with the industry’s 6.2% increase. Nonetheless, efforts to ramp up its growth profile and capital position should drive share price higher.

There have been a host of acquisitions in the insurance space of late, given significant capital availability. Assurant (AIZ - Free Report) acquired TRYGLE Co. Ltd. to maximize the daily usage of mobile devices, electronics and home appliances. In the first quarter of 2021, Brown & Brown, Inc.’s (BRO - Free Report) subsidiary, Brown & Brown of Ohio, LLC acquired substantially all Berry Insurance Group assets as well as O’Leary Insurances. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC ("MMA") recently acquired Compass Financial Partners, a Greensboro, NC-based retirement consulting and investment advisory company.

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

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