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Aon to Boost Investment Capabilities With Townsend Buyout

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Aon plc (AON - Free Report) has signed a definitive agreement to acquire The Townsend Group, majority stake of which is owned by Colony NorthStar, Inc., a leading global real estate and investment management firm.

The deal, valued at nearly $475 million, is likely to close over the next six months.

Townsend is a leading provider of global investment management and advisory services with primary focus on real estate. Hence, this buyout is expected to strengthen Aon's presence in the real estate industry. The company’s offerings in alternative private market assets further reflect its increasingly important role in client portfolios.

Aon has been taking up several inorganic growth initiatives to sharpen its focus on delivering advice and solutions, and expand its global footprint. This acquisition is the most recent instance of Aon's commitment to allocate capital to high-value solutions in order to address emerging client needs.

In the last year, the stock has gained 24%, outperforming the industry’s rally of 16%.

Townsend seems to be an attractive fit for Aon’s Investment business which currently manages more than $100 billion of worldwide assets and advises on $4.2 trillion of assets globally for more than 2,500 clients around the world. 

Townsend presently  provides advisory service on $175.7 billion in global assets and manages $14.5 billion in assets. Its client base consists of many of the world's leading global investors in North America, Asia, Europe and the Middle East.

Aon, a Zacks Rank #3 (Hold) insurance broker, is one of the top three OCIO (Outsourced Chief Investment Officer) services providers in the world. The integration of Townsend's investment management expertise into Aon’s Investment business, will further boost the later’s investment capabilities.

Stocks That Warrant a Look

Investors interested in the finance sector can consider better-ranked stocks like American Financial Group, Inc. (AFG - Free Report) , Argo Group International Holdings, Ltd. (AGII - Free Report) and Credit Acceptance Corporation (CACC - Free Report) . All of the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Financial Group, the property and casualty insurer delivered positive surprises in three of the last four quarters with an average of 17.0%.

Argo Group International, another property and casualty insurer delivered positive surprises in each of the last four quarters with an average of 26.5%.

Credit Acceptance, a consumer loans providing company delivered positive surprises in each of the last four quarters with an average of 6.7%.

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