Arthur J Gallagher Continues Buying Spree

Arthur J Gallagher & Co. (AJG) has inked a deal to acquire a majority stake in Latin American property and casualty insurer, JAO & Partners, for an undisclosed amount.

Arthur J Gallagher & Co. in partnership with Grupo CP announced the acquisition of 56% stake in Lima, Peru-based JAO & Partners, which generates annualized revenues of nearly $4 million.

Arthur J. Gallagher & Co.’s strong financial position comprising substantial cash balance and retained earnings continues to support its series of acquisitions.

The abovementioned acquisition complements Arthur J Gallagher & Co.’s risk management services portfolio as JAO & Partners offers property and casualty and financial risk products to its clients across Peru. They are specialized in the energy, mining and construction industries. Moreover, the deal should enhance the acquirer’s international presence by building base in Latin America.

Arthur J. Gallagher & Co. regularly undertakes acquisitions to augment its product and service offerings and also leverage its international footprint. In the previous quarter, the company made eleven acquisitions. Also in Feb this year, Arthur J Gallagher & Co. announced the acquisition of Kent, Kent & Tingle, based in Shreveport, Louisiana for an undisclosed amount. This buyout is expected to consolidate the acquirer’s employee benefit, risk management and property and casualty insurance services business.

Prior to that, on Feb 14, in an effort to consolidate its foothold throughout the United States, Arthur J Gallagher & Co. had announced the first buyout of the quarter by acquiring Alabama-based Benefit Development Group of Selma for an undisclosed amount. This takeover complements acquirer’s employee benefits operations and brokerage services.

Going ahead, we expect Arthur J. Gallagher & Co.’s compelling inorganic growth story to influence analysts to raise their estimates, which in turn will exert upward pressure on its Zacks Rank. Arthur J. Gallagher & Co. presently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Better-ranked insurance brokers worth considering include Marsh & McLennan Companies, Inc. (MMC), Cninsure Inc. (CISG) and Erie Indemnity Company (ERIE). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on AJG
Read the Full Research Report on MMC
Read the Full Research Report on ERIE
Read the Full Research Report on CISG


Zacks Investment Research