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Brown & Brown (BRO) to Boost Employee Benefits With Buyout

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Brown & Brown, Inc. BRO announced that Brown & Brown of Florida, Inc. has bought Sudler Insurance Services.

Founded in 1995, Sudler Insurance Services offers employee benefits products and services across Florida, Michigan and South Carolina. The addition of Sudler Insurance will boost the acquirer’s employee benefits business.

Brown & Brown and its subsidiaries continuously make strategic acquisitions to expand globally, add capabilities and boost operations. Also, these strategic buyouts help Brown & Brown to increase commissions and fees, which, in turn, drive revenues.

Brown & Brown’s impressive growth is driven by organic and inorganic means across all segments. Also, strategic acquisitions and mergers help it spread its operations. In over a span of a more than two decades, the company has acquired about 500 insurance intermediary operations. In the first half, it completed four acquisitions with annual revenues of approximately $44 million. Brown & Brown intends to make consistent investments in boosting organic growth and margin expansion. Its solid earnings have allowed the company to expand its capabilities with the buyouts extending the company’s geographic footprint.

Consistent operational results have been aiding Brown & Brown in generating solid cash flows for deployment in strategic initiatives. It has maintained a strong liquidity position, with $850.2 million of cash and cash equivalents as well as $800 million of accessible capital on revolver.

Shares of Brown & Brown have rallied 17.6% year to date compared with its industry’s increase of 6.3%. We expect this Zacks Rank #2 (Buy) insurance broker’s sustained operational performance, higher commissions and fees, and a sturdy capital position to help it retain the momentum.

Zacks Investment Research
Zacks Investment Research

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Given insurance industry’s adequate capital level, players are pursuing strategic mergers and acquisitions. Arthur J. Gallagher & Co. AJG inked an agreement to buy Willis Towers Watson plc’s WLTW Willis Re for $3.25 billion in cash to expand its global value proposition in reinsurance. Horace Mann Educators Corporation HMN has agreed to buy Madison National Life Insurance Company for $172.5 million to boost its presence in the education market.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report

Brown & Brown, Inc. (BRO): Free Stock Analysis Report

Horace Mann Educators Corporation (HMN) : Free Stock Analysis Report

Willis Towers Watson Public Limited Company (WLTW): Free Stock Analysis Report

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