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Arthur J. Gallagher (AJG) Buys Brokers' House Stake in Turkey
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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired a majority stake in Brokers' House (BH Sigorta ve Reasürans Brokerligi A.S.) to venture into Turkey. The terms of the transaction have not been revealed yet.
Istanbul-based Brokers' House is a commercial insurance and facultative reinsurance broker, offering a broad range of commercial and specialty coverages, including property, financial lines, energy, engineering and marine cargo. This Turkish specialty broker has been Gallagher Global Network’s partner since 2014. The addition of Brokers' House will thus help Arthur J. Gallagher make its foray into Turkish specialty broking market.
This marks the company’s third buyout in the ongoing quarter. In the first half of 2021, the company completed 14 mergers, representing about $173.8 million of annualized revenues. Its merger and acquisition pipeline is quite strong with about $300 million revenues associated with nearly 40 term sheets either agreed upon or being prepared.
A solid capital position supports Arthur J. Gallagher in its growth initiatives. The company estimates more than $2.5 billion for merger and acquisitions consisting $1 billion in cash, about $650 million of net cash generation in the second half of 2021 and $600 million to $700 million of borrowing capacity.
Strategic acquisitions have helped the company expand operations in the United Kingdom, Australia, Canada, New Zealand and Bermuda. Arthur J. Gallagher’s revenues are geographically diversified with strong domestic and international operations with international operations contributing about one-third of revenues. The company expects international contribution to total revenue to increase, given the number and size of the non-U.S. acquisitions.
This Zacks Rank #3 (Hold) insurance broker remains focused on long-term growth strategies for delivering organic revenue improvement, and pursuing strategic mergers and acquisitions. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Shares of Arthur J. Gallagher have gained 14.4% year to date compared with the industry’s 6.2% increase. Efforts to ramp up its growth profile and capital position should continue to drive share price higher.
Image Source: Zacks Investment Research
Given insurance industry’s adequate capital level, players are pursuing strategic mergers and acquisitions. Stewart Information Services Corporation (STC - Free Report) has acquired Thomas Title & Escrow team and offices in Scottsdale, Houston and Dallas in its efforts to consolidate its presence in the commercial operations. Athene Holding Ltd. along with Apollo Global Management has agreed to purchase 15% stake in Challenger Limited. This marks Athene’s entry in the Australian market. Horace Mann Educators Corporation (HMN - Free Report) has agreed to buy Madison National Life Insurance Company to boost presence in the education market.
Image: Bigstock
Arthur J. Gallagher (AJG) Buys Brokers' House Stake in Turkey
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired a majority stake in Brokers' House (BH Sigorta ve Reasürans Brokerligi A.S.) to venture into Turkey. The terms of the transaction have not been revealed yet.
Istanbul-based Brokers' House is a commercial insurance and facultative reinsurance broker, offering a broad range of commercial and specialty coverages, including property, financial lines, energy, engineering and marine cargo. This Turkish specialty broker has been Gallagher Global Network’s partner since 2014. The addition of Brokers' House will thus help Arthur J. Gallagher make its foray into Turkish specialty broking market.
This marks the company’s third buyout in the ongoing quarter. In the first half of 2021, the company completed 14 mergers, representing about $173.8 million of annualized revenues. Its merger and acquisition pipeline is quite strong with about $300 million revenues associated with nearly 40 term sheets either agreed upon or being prepared.
A solid capital position supports Arthur J. Gallagher in its growth initiatives. The company estimates more than $2.5 billion for merger and acquisitions consisting $1 billion in cash, about $650 million of net cash generation in the second half of 2021 and $600 million to $700 million of borrowing capacity.
Strategic acquisitions have helped the company expand operations in the United Kingdom, Australia, Canada, New Zealand and Bermuda. Arthur J. Gallagher’s revenues are geographically diversified with strong domestic and international operations with international operations contributing about one-third of revenues. The company expects international contribution to total revenue to increase, given the number and size of the non-U.S. acquisitions.
This Zacks Rank #3 (Hold) insurance broker remains focused on long-term growth strategies for delivering organic revenue improvement, and pursuing strategic mergers and acquisitions. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.
Shares of Arthur J. Gallagher have gained 14.4% year to date compared with the industry’s 6.2% increase. Efforts to ramp up its growth profile and capital position should continue to drive share price higher.
Image Source: Zacks Investment Research
Given insurance industry’s adequate capital level, players are pursuing strategic mergers and acquisitions. Stewart Information Services Corporation (STC - Free Report) has acquired Thomas Title & Escrow team and offices in Scottsdale, Houston and Dallas in its efforts to consolidate its presence in the commercial operations. Athene Holding Ltd. along with Apollo Global Management has agreed to purchase 15% stake in Challenger Limited. This marks Athene’s entry in the Australian market. Horace Mann Educators Corporation (HMN - Free Report) has agreed to buy Madison National Life Insurance Company to boost presence in the education market.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.