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Truist Financial (TFC) to Buy Constellation Affiliated Partner

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In order to further strengthen its insurance business, Truist Insurance Holdings, a subsidiary of Truist Financial Corporation (TFC - Free Report) , has announced a deal with RedBird Capital Partners to acquire the insurance distribution platform Constellation Affiliated Partners.

Financial terms of the deal have not been disclosed yet. The deal will likely add roughly $160 million of annual revenues to the wholesale division of Truist Insurance Holdings.

Formed in 2019 by RedBird Capital Partners, Constellation Affiliated Partners’ four core specialty markets include contractors' general liability, transportation, condominium/homeowners associations, and professional liability. The company has expanded its operation through acquisition strategies.

Truist Insurance Holdings will integrate Constellation Affiliated Partners with CRC Group. CRC Group is the wholesale distributor of specialty insurance products.

John Howard, chairman and CEO of Truist Insurance Holdings, said, "The Constellation Affiliated Partners transaction is a key acquisition that will further build out our national programs business. It significantly expands our wholesale division, allowing us to double our programs business, and brings greater diversity to the types of programs we can provide clients by adding their complementary offerings." He further added, “We have a shared commitment to accelerating our investment in data and analytics, and look forward to continuing to grow our business, both organically and through further acquisitions”

Per Kelly S. King, chairman and CEO of Truist Financial, "This acquisition enables us to continue diversifying our revenue and provide expansive insurance solutions to our clients—while ultimately helping us fulfill our purpose to build better lives and communities."

Truist Financial’s acquisition strategy reflects its solid balance-sheet position. Also, management is open for such efforts, with an aim to further support fee income sources. In fact, in 2020, the company closed five insurance broker deals, which are likely to add roughly $110 million of combined annual revenues.

Over the past six months, shares of Truist Financial have rallied 26.2%, underperforming the industry’s 38.8% rally.

Currently, Truist Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Recent Acquisitions

In April, Bank of America (BAC - Free Report) acquired Santa Barbara, CA-based Axia Technologies, Inc., a health care payment and technology firm that provides secure patient payments. The terms of the transaction remain undisclosed.

Further, earlier this month, Glacier Bancorp, Inc. (GBCI - Free Report) announced a definitive agreement to acquire American Fork, UT-based Altabancorp for $933.5million.

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