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Arthur J. Gallagher (AJG) Expands in Brisbane With Buyout
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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired CA Insurance Brokers. The terms of the transaction have not been revealed.
Brisbane, Australia-based CA Insurance Brokers was founded in 2002. This mid-market insurance broker specializes in commercial transportation; construction, earthmoving and professional risks. Thus, its addition will help the acquirer leverage CA Insurance Brokers’ suite of new markets and client product offerings.
Moreover, the buyout will help Arthur J. Gallagher expand its presence and capabilities in Brisbane.
Arthur J. Gallagher is one of the top five global brokers, having a presence in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom.
In the first quarter of 2020, Arthur J. Gallagher’s international operations across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom generated 27% of revenues. Given the number and size of its non-U.S. acquisitions, the insurance broker expects international contribution to total revenues to increase.
This marks the second buyout in the ongoing quarter. The company had made eight buyouts in the year-ago quarter with estimated annualized revenues of $124.2 million. The company’s merger and acquisition pipeline is quite strong with about $200 million of revenues, associated with about 30 term sheets either agreed upon or being prepared. Management believes that 2020 should be another strong year for tuck-in merger and acquisition strategy as it continues to attract entrepreneurial partners. The company targets about $1.5 billion to $1.6 billion of mergers and acquisitions with free cash and debt.
This Zacks Rank #3 (Hold) insurance broker remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. 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 7% year to date, outperforming the industry’s decrease of 2.5%. Efforts to ramp up its growth profile and capital position should continue to drive share price higher.
There have been a host of acquisitions in the insurance space of late, given the significant capital available. Last month, Brown & Brown (BRO - Free Report) acquired Loan Protector Insurance Services. Recently, Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Oliver Wyman acquired a minority stake in Corridor Platforms.
Stock to Consider
A better-ranked insurance broker is eHealth (EHTH - Free Report) . eHealth provides services like private health insurance exchange in the United States and China to families, individuals and small businesses. The company came up with average four-quarter positive surprise of 78.40%. The company sports a Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Arthur J. Gallagher (AJG) Expands in Brisbane With Buyout
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired CA Insurance Brokers. The terms of the transaction have not been revealed.
Brisbane, Australia-based CA Insurance Brokers was founded in 2002. This mid-market insurance broker specializes in commercial transportation; construction, earthmoving and professional risks. Thus, its addition will help the acquirer leverage CA Insurance Brokers’ suite of new markets and client product offerings.
Moreover, the buyout will help Arthur J. Gallagher expand its presence and capabilities in Brisbane.
Arthur J. Gallagher is one of the top five global brokers, having a presence in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom.
In the first quarter of 2020, Arthur J. Gallagher’s international operations across Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom generated 27% of revenues. Given the number and size of its non-U.S. acquisitions, the insurance broker expects international contribution to total revenues to increase.
This marks the second buyout in the ongoing quarter. The company had made eight buyouts in the year-ago quarter with estimated annualized revenues of $124.2 million. The company’s merger and acquisition pipeline is quite strong with about $200 million of revenues, associated with about 30 term sheets either agreed upon or being prepared. Management believes that 2020 should be another strong year for tuck-in merger and acquisition strategy as it continues to attract entrepreneurial partners. The company targets about $1.5 billion to $1.6 billion of mergers and acquisitions with free cash and debt.
This Zacks Rank #3 (Hold) insurance broker remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. 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 7% year to date, outperforming the industry’s decrease of 2.5%. Efforts to ramp up its growth profile and capital position should continue to drive share price higher.
There have been a host of acquisitions in the insurance space of late, given the significant capital available. Last month, Brown & Brown (BRO - Free Report) acquired Loan Protector Insurance Services. Recently, Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Oliver Wyman acquired a minority stake in Corridor Platforms.
Stock to Consider
A better-ranked insurance broker is eHealth (EHTH - Free Report) . eHealth provides services like private health insurance exchange in the United States and China to families, individuals and small businesses. The company came up with average four-quarter positive surprise of 78.40%. The company sports a Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>