Arthur J. Gallagher & Co. (AJG) has announced the acquisition of Parmia Pty Ltd. or Parmia, as a move to strengthen its presence in Australia and boost inorganic growth. The terms of the transaction were not disclosed.
Parmia is an insurance broker and risk management services firm providing retail property/casualty insurance solutions to professional associations and organizations. Including graphic design, finance, fitness and beauty sectors, this firm provides coverage to more than 15 associations.
Arthur J. Gallagher has been focused on consolidating its operations in Australia. Its acquisition of Wesfarmers Ltd. for $938 million made in June this year marks the biggest deal.
Arthur J. Gallagher remains focused on international expansion through acquisitions. This insurance broker has been on an acquisition spree in the present quarter. The acquisition of Caribbean-based Minvielle & Chastanet Insurance Brokers, CT-based Cowles & Connell, MO-based Trip Mate, Inc., CO-based Denman Consulting Services, U.K-based Baker Tilly's Employee Benefits Solutions Business and CT-based Everett James, Inc. are some notable ones.
Arthur J. Gallagher’s inorganic growth looks impressive. For the first six months of 2014, it made 26 acquisitions with annualized revenue of $514.9 million. Taking into account the latest deal, the company has made ten acquisitions in the present quarter. Going forward, the number is expected to rise.
Arthur J. Gallagher’s solid liquidity continues to aid its inorganic growth.
With the acquisitions generating optimism, the estimates for this Zacks Rank #3 (Hold) insurance broker have been witnessing upward revisions. For 2014, the Zacks Consensus Estimate is currently pegged at $2.51 (up 2%) per share while for 2015, it is $2.93 (up 1.7%) per share. The long-term growth of Arthur J. Gallagher is targeted at 14.8%.
Insurance brokers are now increasingly opting for inorganic growth to boost prospects. Aon plc’s (AON) global risk management business 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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