In an effort to expand its geographic presence, Marsh & McLennan Agency LLC (“MMA”), an operating subsidiary of Marsh & McLennan Companies, Inc. (MMC), has purchased Florida-based Eidson Insurance. No other details pertaining to the acquisition were disclosed by the entities.
Per the agreement, all executives of the acquired company will join the management team of MMA. Eidson Insurance will be a part of MMA’s Florida hub which the company created a year ago and operates as a subsidiary of Marsh & McLennan.
The company’s focus is to serve the middle market consumers and individuals present in Florida. Eidson will continue to operate from its office in Orlando. As a result of this acquisition, Marsh & McLennan will have operating units in Miami, Fort Lauderdale, West Palm Beach, Jacksonville and Orlando.
Following the news, Marsh & McLennan’s shares gained 1.5% (or 50 cents) to close at $34.35 yesterday.
Of late, Marsh & McLennan has been proactive in acquiring companies. In July, MMA acquired Wisconsin-based Security Insurance Services Inc. to expand insurance and employee benefits coverage.
We believe that these acquisitions will aid Marsh & McLennan’s top-line going forward and also help the company sustain its growth strategy, which is crucial amid the soft pricing environment and challenges associated with antitrust litigations. We believe, owing to these attributes, the company is still a dominant player in its industry despite sluggish organic growth.
However, Aon Corporation (AON), the company’s closest competitor, continues to pose a stiff challenge. Alongside, Aon is striving to expand its services and products both organically and inorganically. It has been adding new clients to its list, renewing contracts and acquiring companies globally.
Marsh & McLennan carries a Zacks #3 Rank that translates into a short-term Hold rating. We also maintain a long-term Neutral recommendation on its shares.Read the Full Research Report on MMC
More From Zacks.com