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Arthur J. Gallagher Acquires Consulting Firm Human Capital

Zacks Equity Research

Arthur J. Gallagher & Co. AJG has acquired Tennessee-based The Human Capital Group, Inc. However, the transaction particulars were not revealed.

The Human Capital Group, founded in 2000, offers retained executive search and leadership consulting on a worldwide basis. It helps its clients find, groom and grow transformational leaders.

This acquisition is expected to help Arthur J. Gallagher add value and cross sell. The addition of Human Capital Group will enable Arthur J. Gallagher’s consulting team to develop solid and secured connections between its clients’ C-Suites and Gallagher Better Works approach to career, organizational and financial prosperity.

This latest transaction marks Arthur J. Gallagher’s 13th buyout so far this quarter. A strong capital position along with solid operational performance should continue to back its inorganic efforts.

Arthur J. Gallagher, a global insurance brokerage firm, has a sound growth track supported by solid organic sales and inorganic growth. So far, Gallagher has completed 542 mergers and acquisitions. The company’s merger and acquisition pipeline is quite strong with about $400 million in revenues. Its strategic buyouts are supported by its solid capital position, which, in turn, is driven by operational excellence. Arthur J. Gallagher targets merger and acquisitions worth about $1.5 billion with free cash and debt. Also, solid organic growth is estimated in the second half of 2019.

Recently, there have been a number of other acquisitions in the insurance industry, given the significant capital available. Last month, Brown & Brown, Inc.’s BRO units, Brown & Brown of Florida, Inc. and Brown & Brown of Massachusetts, LLC acquired all the assets of CKP Insurance, LLC and Yozell Associates.

Arthur J. Gallagher has gained 0.9% quarter to date against the industry’s decline of 0.9%. The company’s policy of ramping up growth and capital should continue to drive shares price higher.

The company currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked insurance stocks include Hallmark Financial Services HALL and Radian Group Inc. RDN. While Hallmark Financial sports a Zacks Rank #1 (Strong Buy), Radian Group  carries a Zacks Rank #2 (Buy) You can see the complete list of today’s Zacks #1 Rank stocks here.

Hallmark Financial provides its services to individuals and businesses in the United States through its subsidiaries. It markets, distributes and services property and casualty products.. Its average four-quarter positive surprise is 97.50%.

Radian Group operates through its subsidiaries and provides mortgage and real estate business services in the United States. Its average four-quarter positive surprise is 10.10%.

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