Arthur J. Gallagher (AJG) Buys Rest of Edelweiss Shares
Arthur J. Gallagher & Co. AJG recently acquired the remaining shares of Edelweiss Gallagher Insurance Brokers Limited from Edelweiss Financial Services Limited wherein it had made a minor investment in 2019. Terms of the transaction were kept under wraps. The deal was approved by the Insurance Regulatory and Development Authority of India.
Mumbai-based Edelweiss Gallagher Insurance Brokers boasts India's leading diversified financial services companies. Being an insurance and reinsurance broker, the company offers a wide array of financial products and services to a diversified client base that includes corporations, institutions and individuals. Having branches in Delhi, Kolkata and Bangalore, its products and services comprise multiple asset classes and consumer segments throughout domestic and global geographies.
We believe, Edelweiss Financial Services is a strategic fit for Arthur J. Gallagher. The partnership has already produced good results so far. This will further provide the acquirer with a golden opportunity to fortify its presence in India.
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 that it currently provides. Its inorganic pipeline remains strong with around $250 million of annualized revenues associated with 40 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.
So far this year, it has made 17acquisitions. Revenue growth rates have generally been 5-15% for 2021 acquisitions to date. The buyouts provide the company with incremental capabilities and services to assist clients across Australia, the U.K., Europe and the United States. The industry player deepens focus 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 its significant capital availability. In the second quarter of 2021, Brown & Brown, Inc. BRO acquired substantially all Piper Jordan assets. Further, Marsh & McLennan Companies, Inc.’s MMC unit Marsh & McLennan Agency LLC (MMA) recently purchased PayneWest Insurance, one of the largest independent agencies in the United States. Additionally, Alleghany Corporation’s Y wholly-owned subsidiary Alleghany Capital Corporation took over Wilbert, Inc. (WPS).
Price Performance
Shares of Arthur J. Gallagher have gained 44.3% in a year, outperforming the industry’s increase of 26.4%. Efforts to ramp up the company’s growth profile and capital position should help its stock retain the price momentum.
Image Source: Zacks Investment Research
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
Alleghany Corporation (Y) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
