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Alleghany (Y) Acquires Wilbert With Piedmont Manufacturing

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Alleghany Corporation’s Y wholly-owned subsidiary Alleghany Capital Corporation has acquired Wilbert, Inc. (WPS). It developed a new wholly-owned subsidiary, Piedmont Manufacturing Group, LLC for the purpose of this acquisition.

Founded in 1965, Belmont -based WPS is a manufacturing and service company. Wilbert Plastic Services utilizes contract manufacturing and technical expertise to provide its customers with affordable product solutions. It is engaged in producing plastic components and assemblies with the use of injection molding, heavy-gauge thermoforming, paint and assembly processes. It remains focused on limiting the cost and improving quality. It provides injection molded and thermoformed parts and multi-component assemblies for original equipment manufacturer ("OEM") customers.

The acquisition of WPS is expected to be a good addition to Alleghany’s portfolio.

In April 2020, Alleghany Corporation’s unit Alleghany Capital had acquired a majority stake in Wilbert Funeral Services, Inc. (WFSI). Wilbert has a leading position in the funeral services industry and its solid business model will enable Alleghany Capital to leverage potential growth opportunities prevailing in non-insurance markets.

Alleghany does not intend to combine WPS and WFSI as the two businesses are different from each other. This has been reflected with the creation of Piedmont Manufacturing, which marked the fifth platform company in Alleghany Capital's Industrial segment.

Alleghany Capital is expected to expand the current market position of WPS. This transaction will widen the customer base and provide the employees of WPS with better growth opportunities and advancement.

Alleghany Capital has been undertaking several strategic initiatives that are intended to boost revenues from middle-market businesses. Alleghany considers strategic acquisitions to be a prudent approach to ramp up its growth profile. Through its subsidiaries, the company pursues acquisitions, which not only widen its geographical presence but also boost its portfolio.

Alleghany Capital’s unit Jazwares has obtained a majority stake in plush toys manufacturer Kellytoy in April 2020. The buyout of Kellytoy is the second major acquisition for Jazwares, following its purchase of Wicked Cool Toys in October 2019. Considering numerous growth opportunities prevailing in global plush markets, Jazwares is expected to gain traction from this move.

In February 2020, Alleghany Capital’s unit PCT acquired Supermill LLC, which serves the metal working industry. The buyout is expected to enhance PCT’s portfolio of cutting consumables and expand its foothold across Northeastern United States. All these initiatives underline Alleghany’s efforts to boost noninsurance revenues, which improved 64% year over year in the first quarter of 2021. The upside was due to higher revenues at Jazwares as well as the impact of Wilbert’s inclusion in the consolidated results.

Shares of this Zacks Rank #2 (Buy) property and casualty insurer have gained 53.7% in a year’s time, compared with the industry's increase of 53.8%. We expect its solid fundamentals to drive the stock in the near term.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Acquisitions in the Same Space

There have been a host of acquisitions in the insurance space of late, given significant capital availability. In the second quarter of 2021, Arthur J. Gallagher & Co. AJG has acquired California-based Kaneko & Krammer Corp. In the first quarter of 2021, Brown & Brown, Inc.’s BRO subsidiary, Brown & Brown of Ohio, LLC acquired substantially all Berry Insurance Group assets as well as O’Leary Insurances. Marsh & McLennan Companies, Inc.’s MMC unit Marsh & McLennan Agency LLC (“MMA”) recently acquired PayneWest Insurance, one of the largest independent agencies in the United States.

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Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report

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