Arthur J. Gallagher (AJG) Expands in Ireland With Buyout
Arthur J. Gallagher & Co. AJG has acquired Doyle Insurance Brokers (Wexford) Limited. It is also known as Doyle Mahon Insurances. The terms of the transaction have been kept under wraps. Shares of AJG gained 0.6% on Nov 4.
Established in 2003, Doyle Mahon Insurances is an Ireland-based, commercial and agriculture insurance broker. It has access to a wide range of markets, specializing in the broking of Commercial & Agricultural Insurance solutions.
The addition of Doyle Mahon Insurances to Arthur J. Gallagher’s portfolio provides the latter with better growth opportunities and further augments the insurer’s presence in Ireland.
This transaction will enable Doyle Mahon Insurances to enhance the client base and service offerings.
Inorganic Growth Story
Arthur J. Gallagher boasts an impressive inorganic story. In the first nine months of 2022, this Zacks Rank #3 (Hold) insurance broker completed 19 tuck-in brokerage mergers, representing about $102.7 million of estimated annualized revenues. AJG also signed another merger late in the third quarter, which represents an additional $40 million of estimated annualized revenues. The recent acquisition marks the fifth acquisition in the fourth quarter of 2022. AJG’s merger and acquisition pipeline is quite strong, with about $400 million of annualized revenues, associated with about 50 term sheets either agreed upon or being prepared.
Arthur J. Gallagher’s revenues are geographically diversified, with strong domestic and international operations and a compelling product and service portfolio. A solid capital position supports AJG in its growth initiatives. It, thus, remains focused on continuing its tuck-in mergers and acquisitions.
AJG remains focused on long-term growth strategies for delivering organic revenue improvement, and pursuing strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements, which should help it post sturdy numbers in the future.
Price Performance
Shares of Arthur J. Gallagher have gained 17.1% in the past year against the industry’s decline of 8%. The company’s efforts to ramp up its growth profile and capital position should continue to drive the share price.
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Stocks to Consider
Some better-ranked insurers from the insurance industry are Erie Indemnity Company ERIE, Ryan Specialty Holdings Inc. RYAN and Axis Capital Holdings Limited AXS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Erie Indemnity’s 2022 and 2023 earnings per share indicates a year-over-year increase of 1.6% and 20.1%, respectively.
The Zacks Consensus Estimate for ERIE’s 2023 earnings has moved 5% north in the past 30 days.
Ryan Specialty’s earnings surpassed estimates in each of the last four quarters, the average beat being 16.84%.
The Zacks Consensus Estimate for RYAN’s 2022 and 2023 earnings per share indicates a year-over-year increase of 14.8% and 18.9%, respectively.
Axis Capital’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 16.5%.
The Zacks Consensus Estimate for AXS’s 2022 and 2023 earnings per share indicates a year-over-year increase of 8% and 34.4%, respectively.
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