Arthur J. Gallagher Boosts Risk Placement with NAI Buyout
Arthur J. Gallagher & Co. AJG has acquired North Alabama Insurance, Inc. (“NAI”) to boost its Risk Placement Services business. However, the terms of the transaction remained undisclosed. With this buyout, company’s year-to-date acquisition tally reaches 24.
Founded in 1982, NAI is a Florence, AL-based wholesale insurance broker and managing general agent. The company provides commercial auto/garage, property/casualty and other specialty insurance placements to independent retail insurance broker customers across the south central United States.
Post acquisition, NAI’s employees will continue to work from its present location. They will, however, report to the head of Risk Placement Services, Inc., which is a subsidiary of Arthur J. Gallagher.
The acquisition fits Arthur J. Gallagher’s quality team-based service culture. The acquirer is expected to enrich its Risk Placement Services business using NAI’s sales expertise, product specialization and focused client services.
The insurance broker has been consistently boosting its inorganic growth profile through buyouts. The company added four new entities to its portfolio in the in the ongoing third quarter as against 13 acquisitions made during the same period in 2014. The company’s solid liquidity position cushions its growth initiatives and therefore, will encourage it to undertake more takeovers going forward.
Arthur J. Gallagher’s compelling inorganic growth and strategic focus on global expansion will likely prompt a revision in earnings estimates and hence, a possible rank upgrade. Currently, the insurance broker carries a Zacks Rank #3 (Hold).
Following the inorganic route to ramp up one’s operational profile seems a well-accepted strategy among insurers as acquisitions rage this space. Earlier this month, Sun Life Financial Inc. SLF completed the takeover of Bentall Kennedy Group. Last month, Willis Group Holdings plc WSH inked a deal to buy PMI Health Group (“PMIHG”) in an attempt to bolster its healthcare advisory business in the U.K. In the same month, a subsidiary of Marsh & McLennan Companies, Inc.’s MMC – Marsh & McLennan Agency LLC – acquired leading independent insurance brokerage firm, Vézina.
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