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Arthur J. Gallagher Consolidates Employee Benefit Solutions

Zacks Equity Research

Arthur J. Gallagher & Co. AJG recently acquired Barrett, Liner & Buss, LLC. The terms of the transaction have not been revealed.

Ocala, FL-based Barrett, Liner & Buss was founded in 1981. The company offers employee benefit solutions to employers in healthcare, manufacturing and education industries. It offers the solutions across Florida.

The buyout will help Arthur J. Gallagher enhance its employee benefit solutions to public entities and healthcare clients and expand its presence in northern Florida.

This marks the third buyout in the ongoing quarter. The company had made eight buyouts in the year-ago quarter with estimated annualized revenues of $124.2 million. The company’s merger and acquisition pipeline is quite strong with about $200 million of revenues, associated with about 30 term sheets either agreed upon or being prepared. Management believes that 2020 should be another strong year for tuck-in mergers and acquisitions as it continues to attract entrepreneurial partners. The company targets about $1.5 billion to $1.6 billion of mergers and acquisitions with free cash and debt.

This Zacks Rank #3 (Hold) insurance broker remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.

Shares of Arthur J. Gallagher have lost 0.4% year to date compared with the industry’s decrease of 6.9%. Efforts to ramp up its growth profile and capital position should help shares bounce back.


There have been a host of acquisitions in the insurance space of late, given the significant capital available. Last month, Brown & Brown BRO acquired Loan Protector Insurance Services. Recently, Marsh & McLennan Companies’ MMC unit Oliver Wyman acquired a minority stake in Corridor Platforms.

A Stock to Consider

A better-ranked insurance broker is eHealth EHTH. eHealth provides services like private health insurance exchange in the United States and China to families, individuals and small businesses. The company came up with average four-quarter positive surprise of 78.40%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

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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
eHealth, Inc. (EHTH) : Free Stock Analysis Report
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