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Arthur J. Gallagher (AJG) Buys Parisco, Boosts Marine Service

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Zacks Equity Research
·3 min read
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Arthur J. Gallagher & Co. AJG recently acquired Parisco AS (Parisco). Terms of the transaction were not disclosed.

Oslo, Norway-based Parisco AS, founded in 2001, is a leading insurance broker and consultant with strategic focus on marine, mobile offshore units, oil & gas companies and the renewables sectors. This company is part of the Insurance Agencies & Brokerages Industry.

The addition of Parisco AS will provide Arthur J. Gallagher customers with exceptional efficiencies throughout the marine, energy and renewables sectors in Norway.

Inorganic Growth Story

Acquisitions enable Arthur J. Gallagher to expand into desirable geographic locations, extend its presence in retail and wholesale insurance and reinsurance brokerage services markets, and increase the volume of general services currently provided. Its inorganic pipeline remains strong, with around $300 million of annualized revenues associated with 30 term sheets signed or being prepared.

Arthur J. Gallagher currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In 2020, the insurance broker completed 27 mergers, representing about $250 million of estimated annualized revenues. So far this year, it has made seven acquisitions. Revenue growth rates have generally been 2.5-15% for 2020 acquisitions. The buyouts provide the company with incremental capabilities and services to assist clients across Australia, the U.K., Europe and the United States. The company remains focused on its long-term growth strategies of delivering organic revenue growth, and pursuing mergers and acquisitions.

Other Acquisitions in the Same Space

There have been a host of acquisitions in the insurance space of late, given significant capital availability. Assurant AIZ acquired TRYGLE Co. Ltd. to maximize the daily usage of mobile devices, electronics and home appliances. 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.

Price Performance

Shares of Arthur J. Gallagher have gained 49.5% in a year, outperforming the industry’s increase of 26.7%. Efforts to ramp up the company’s growth profile and capital position should help shares gain further.

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

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