Arthur J. Gallagher & Co. (AJG) has announced the acquisition of NY-based Hagedorn & Company. The move marks an effort by the company to ramp up its retail insurance business. Notably, the terms of the transaction were not disclosed.
After this declaration that came in the middle of the trading session, the stock gained 0.18% and closed at $45.51. Investors are expected to respond positively to this acquisition in the next session, leading to a rise in the stock price.
Hagedorn is a retail insurance broker which provides property/casualty, risk management, group benefits and personal lines insurance products and services to the commercial and individual clients located across northeastern United States. They also serve clients in the financial, manufacturing, real estate, healthcare, marine and legal industries, as well as non-profit organizations.
The acquisition will help Arthur J. Gallagher leverage its Northeastern presence and operations, riding on the strength of Hagedorn niche specializations, market presence and expertise.
Arthur J. Gallagher has been consistently boosting its retail insurance business. Its latest acquisitions, namely Caribbean-based Minvielle & Chastanet Insurance Brokers and CT-based Cowles & Connell reflect its endeavors in this respect.
Arthur J. Gallagher remains focused on enhancing its inorganic growth profile through acquisitions. Its year-to-date acquisition tally touched 37. Given its balance sheet strength that supports takeovers, we expect the number to rally going forward.
Riding on its strong fundamentals, Arthur J. Gallagher has been witnessing upward estimate revisions. The Zacks Consensus Estimate for 2014 and 2015 is currently pegged at $2.51 and $2.93, respectively.
Currently, Arthur J. Gallagher has a Zacks Rank #3 (Hold).
Insurance brokers are now increasingly resorting to inorganic growth to boost prospects. Aon plc (AON)’s Aon Risk Solutions acquired a Lima-Peru-based risk and insurance solutions provider, Grana y Asociados last month. Marsh & McLennan Companies Inc.’s (MMC) leading insurance brokerage wing, Marsh Inc. also announced the purchase of Montreal-based commercial insurance brokerage, Kocisko Insurance Brokers Inc. earlier this month.
A few days back, Willis Group Holdings plc (WSH) declared that its North American reinsurance business, Willis Re Inc. has entered into an agreement to acquire the assets of SurePoint Reinsurance Advisors, LLC.
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