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Brown & Brown (BRO) Boosts Employee Benefits With AGIS Buyout

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Brown & Brown, Inc. (BRO - Free Report) has acquired considerably all AGIS Network, Inc.’s assets.

San Ramon, CA-based AGIS Network enables the exchange of eldercare information, solutions, and services to assist individuals, employers, agencies, and service providers across the nation. The employee benefits enrollment firm furnishes technology-driven resources for the aged communities. It connects government agencies, employers, service providers, and families in the eldercare and disability communities.

With the acquisition of AGIS Network, Brown & Brown will expand its employee benefits and brokerage operations and provide value to its employee benefit customers. AGIS Network is expected to provide the acquirer with additional facilities to serve the long-term care marketplace.

This transaction will enable AGIS to boost its capabilities and address the needs of its customers.

Notably, the latest transaction marks the fourth buyout of the insurance broker in third-quarter 2021. In the second half of 2021, it completed four acquisitions with annual revenues of approximately $44 million.

Inorganic Growth Story

Brown & Brown along with its subsidiaries pursues frequent buyouts in order to achieve top-line growth. Its revenues received a boost as a result of a persistent focus on net new business growth and acquisitions.

Consistent investments and solid earnings will likely aid this Zacks Rank #2 (Buy) insurance broker in carrying out inorganic efforts, expand its capabilities, and extend its geographic footprint. Acquisitions drive Brown & Brown’s commission and fees, which, in turn, boost revenue growth.

From 1993 through second-quarter 2021, the company acquired 565 insurance intermediary operations. It remains well poised with its low leverage, capital structure, and access to additional capital to fund its merger and acquisition activities. Consistent operational results have helped Brown & Brown generate solid cash flows to be deployed in strategic initiatives.

The stock has risen 26.6% in the past year compared with the industry’s growth of 15.2%. The company’s efforts to ramp up growth and capital position should continue to drive its shares.

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Other Acquisitions in the Same Space

Given the insurance industry’s adequate capital level, the players are pursuing strategic mergers and acquisitions. Arthur J. Gallagher & Co. (AJG - Free Report) inked an agreement to buy Willis Towers Watson plc’s Willis Re for $3.25 billion in cash to expand its global value proposition in reinsurance.  Marsh McLennan’s (MMC - Free Report) Marsh McLennan Agency has acquired Vaaler Insurance.

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


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