Arthur J. Gallagher & Co. (AJG) has announced the takeover of Australia’s Instrat Insurance Brokers Pty Ltd., thereby boosting its presence in the country. Terms of the transaction were not revealed.
Instrat, an insurance broker and risk management services firm, provides small to middle-market commercial and individual clients with retail property/casualty insurance products and services. It is an expert in the development of tailored group programs for franchisees, licensees, associations, tradespeople, medical professionals, martial artists and sporting clubs.
Arthur J. Gallagher’s experience of more than twenty years, in depth knowledge in insurance and strong market relationships, when combined with the attributes of Instrat would further enhance the former’s portfolio. Additionally, Instrat’s sales and marketing culture matches that of the insurance broker’s.
Under the direction of Arthur J. Gallagher's Australian brokerage operation head, Andrew Godden, Instrat’s directors — Peter Johnston and Jim Santamaria, along with their associates — will operate at their current location.
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 consistently pursuing international expansion through acquisitions and has been on a buyout spree in the current quarter. Its recent acquisitions, like that of Iowa-based Miller-Harrison, Virginia-based The Titan Group, LLC and Illinois-based The Forker Company, reflect its endeavors in this respect.
To date, Arthur J. Gallagher has made eight acquisitions in the fourth quarter, bringing the year-to-date tally to 45. For the first nine months of 2014, the insurance broker generated annualized revenues of $693.6 million from acquisitions. Going forward, revenues are expected to grow further in the remainder of 2014 as the company’s strong liquidity cushions its inorganic growth initiatives.
Currently, Arthur J. Gallagher hold a Zacks Rank #3 (Hold).
Other Insurance Brokers Adopting Inorganic Route
The competitive environment for Arthur J. Gallagher is heightening with its peers boosting inorganic growth as well. In fourth-quarter 2014, Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (MMC), inked a deal to buy SCM Strategic Capital Management AG.
Correspondingly, Validus Holdings, Ltd. (VR) has acquired Western World Insurance Group, Inc. Meanwhile, Willis Group Holdings Public Limited Company (WSH) has proposed the takeover of SurePoint Reinsurance, along with the buyout of a range of Irish pension and financial advisory businesses from IFG Group plc.
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