We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arthur J. Gallagher (AJG) Buys AOBG, Expands in Affinity Market
Read MoreHide Full Article
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired LDJ American Online Benefits Group, LLC (AOBG). Terms of the transaction were kept under wraps.
Founded in 2013, Addison, TX-based AOBG is a program manager and has over 28 years of experience in the health, life and supplemental insurance markets. It designs, develops and markets supplemental health insurance and wellness products, which include short-term medical, hospital indemnity, AD&D, vision care and a wellness program. It caters to clients throughout the United States.
With this acquisition, Arthur J. Gallagher will leverage the expertise of AOBG in offering products that address the demands of self-employed and retired workers. This in turn will enhance and boost the acquirer’s capabilities in the Affinity market.
Inorganic Growth Story
Acquisitions enable Arthur J. Gallagher 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 around $250 million of annualized revenues associated with 40 term sheets signed or being prepared.
In the first quarter, the insurance broker completed five brokerage mergers, representing about $90 million of estimated annualized revenues. So far this year, it has made 13 acquisitions. Revenue growth rates have generally been 5-15% for 2021 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. In the ongoing second quarter of 2021, Brown & Brown, Inc. (BRO - Free Report) acquired substantially all Piper Jordan assets. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (“MMA”) recently acquired PayneWest Insurance, one of the largest independent agencies in the United States. Alleghany Corporation’s wholly-owned subsidiary Alleghany Capital Corporation acquired Wilbert, Inc. (WPS).
Price Performance
Shares of Arthur J. Gallagher have gained 55.3% in a year, outperforming the industry’s increase of 30.2%. Efforts to ramp up the company’s growth profile and capital position should help shares gain further.
Image Source: Zacks Investment Research
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
Image: Bigstock
Arthur J. Gallagher (AJG) Buys AOBG, Expands in Affinity Market
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired LDJ American Online Benefits Group, LLC (AOBG). Terms of the transaction were kept under wraps.
Founded in 2013, Addison, TX-based AOBG is a program manager and has over 28 years of experience in the health, life and supplemental insurance markets. It designs, develops and markets supplemental health insurance and wellness products, which include short-term medical, hospital indemnity, AD&D, vision care and a wellness program. It caters to clients throughout the United States.
With this acquisition, Arthur J. Gallagher will leverage the expertise of AOBG in offering products that address the demands of self-employed and retired workers. This in turn will enhance and boost the acquirer’s capabilities in the Affinity market.
Inorganic Growth Story
Acquisitions enable Arthur J. Gallagher 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 around $250 million of annualized revenues associated with 40 term sheets signed or being prepared.
Arthur J. Gallagher currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the first quarter, the insurance broker completed five brokerage mergers, representing about $90 million of estimated annualized revenues. So far this year, it has made 13 acquisitions. Revenue growth rates have generally been 5-15% for 2021 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. In the ongoing second quarter of 2021, Brown & Brown, Inc. (BRO - Free Report) acquired substantially all Piper Jordan assets. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (“MMA”) recently acquired PayneWest Insurance, one of the largest independent agencies in the United States. Alleghany Corporation’s wholly-owned subsidiary Alleghany Capital Corporation acquired Wilbert, Inc. (WPS).
Price Performance
Shares of Arthur J. Gallagher have gained 55.3% in a year, outperforming the industry’s increase of 30.2%. Efforts to ramp up the company’s growth profile and capital position should help shares gain further.
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>