U.S. markets closed
  • S&P Futures

    4,160.25
    -2.25 (-0.05%)
     
  • Dow Futures

    33,915.00
    -8.00 (-0.02%)
     
  • Nasdaq Futures

    13,997.50
    -16.50 (-0.12%)
     
  • Russell 2000 Futures

    2,253.70
    -2.00 (-0.09%)
     
  • Crude Oil

    63.41
    -0.05 (-0.08%)
     
  • Gold

    1,765.40
    -1.40 (-0.08%)
     
  • Silver

    25.92
    -0.04 (-0.17%)
     
  • EUR/USD

    1.1967
    -0.0009 (-0.07%)
     
  • 10-Yr Bond

    1.5300
    -0.1080 (-6.59%)
     
  • Vix

    16.57
    -0.42 (-2.47%)
     
  • GBP/USD

    1.3776
    -0.0008 (-0.06%)
     
  • USD/JPY

    108.6500
    -0.0660 (-0.06%)
     
  • BTC-USD

    63,389.20
    +270.76 (+0.43%)
     
  • CMC Crypto 200

    1,400.32
    +19.38 (+1.40%)
     
  • FTSE 100

    6,983.50
    +43.92 (+0.63%)
     
  • Nikkei 225

    29,721.64
    +78.95 (+0.27%)
     

Brown & Brown's Subsidiary Buys Assets of Bright & Associates

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Brown & Brown, Inc.’s BRO subsidiary Brown & Brown Dealer Services (“BBDS”) acquired Bright & Associates, Inc. and its affiliate Auto Care Essentials, LLC (collectively, Bright & Associates).

Formed in 1977, this Missouri-based Bright & Associates is an independent sales and service organization. It provides finance and insurance (F&I) products and sales support to the automotive, marine, power sport and RV markets. The firm also markets paint and fabric protection products and services through its Auto Care Essentials business.

Rationale Behind the Deal

The acquisition of Bright & Associates will provide Brown & Brown with a wealth of experience in F&I products and services. The buyout will enable the acquirer to extend the presence of BBDS in Missouri and Illinois.

Also, the capabilities and expertise of Brown & Brown and its subsidiary, BBDS, will provide benefits, improved products as well as services for the customers of Bright & Associates.

Inorganic Growth Story

Brown & Brown and its subsidiaries pursue frequent buyouts to achieve top-line growth, global expansion, add capabilities and boost operations. Its revenues have grown as a result of its continued focus on net new business growth and acquisitions. Notably, this latest transaction marks the first buyout by the insurance broker in the fourth quarter of 2020. In the first six months of 2020, the insurer closed 10 transactions with estimated annual revenues of $85 million.

Consistent investments along with solid earnings will likely aid this Zacks Rank #3 (Hold) insurance broker in its inorganic efforts. These acquisitions drive Brown & Brown’s commission and fees, which boost revenue growth.

From 1993 through the second quarter of 2020, the company acquired 546 insurance intermediary operations. It continues to make investments to drive growth and margins.

Acquisitions in the Industry

There have been a number of significant acquisitions in the insurance domain of late. Recently, Arthur J. Gallagher & Co. AJG acquired NY-based Merriam Agency to boost its repertoire. Arch Capital Group Ltd. ACGL agreed to acquire Watford Holdings Ltd. WTRE for $622 million in cash.
You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Shares of Brown & Brown have risen 34.1% in the past year compared with the industry’s growth of 14.4%. The company’s efforts to ramp up growth and capital position should continue to drive shares higher.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot stocks we're targeting >>


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
 
Arthur J. Gallagher Co. (AJG) : Free Stock Analysis Report
 
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
 
Brown Brown, Inc. (BRO) : Free Stock Analysis Report
 
Watford Holdings Ltd. (WTRE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research