Arthur J. Gallagher & Co. AJG recently acquired Gruppo Marcucci, LLC to strengthen foothold in the insurance broker market, and aid the brokers with access to human resources (HR) and benefits technology outsourcing market intelligence. However, financial details of the transaction were kept under wraps.
Chicago-based Gruppo Marcucci, a consulting firm established in 2005, primarily focuses on HR and benefits technology solutions. Further, the company caters to benefit brokers and consultants, along with employers, insurance carriers, service providers and the investment community.
Moreover, we believe that the buyout would boost the already robust inorganic growth portfolio of the company. Post takeover, Gruppo Marcucci will continue to operate from its current location.
We expect Gruppo Marcucci’s in-depth industry expertise, national footprint and outstanding market relationships to be highly value accretive to the acquirer’s client portfolio. Additionally, the acquired company’s thought leadership in the HR and benefits technology space will enable the acquirer’s clients to gain greater access to such services. Therefore, the latest buyout will be a perfect fit for Arthur J. Gallagher.
The Zacks Rank #3 (Hold) insurance broker is known for improving its growth profile through acquisitions. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here. Most of its buyouts are within the brokerage segment. Nonetheless, Arthur J. Gallagher has increased purchases in the retail employee benefits brokerage and wholesale brokerage sectors. The brokerage service provider intends to pursue smaller tuck-in mergers in 2017.
Notably, shares of Arthur J. Gallagher gained 4.22% in the last three months, outperforming the Zacks categorized Insurance Broker industry’s growth of about 1.21%. Strategic acquisitions like these have mainly contributed to the outperformance, which in turn have improved the insurance broker’s inorganic portfolio as well as accelerated growth.
Acquisitions are a well-accepted strategy for growth among insurers. Recently, Assurant, Inc. AIZ has inked a deal to buy Green Tree Insurance Agency, Inc. from Walter Investment Management Corp. WAC to strengthened its capabilities in the housing market while Brown and Brown Inc. BRO announced that its unit has acquired the commercial MGA operations of Insurance House.
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