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Marsh & McLennan (MMC) Arm Buys PayneWest to Boost Portfolio

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Marsh & McLennan Companies, Inc.’s MMC unit Marsh & McLennan Agency LLC (MMA) acquired PayneWest Insurance, which is one of the largest independent agencies in the United States. Notably, MMA is the middle market agency arm of Marsh. However, financial terms of the transaction were kept under wraps.

PayneWest is based in Missoula, MT with offices across Idaho, Montana, Oregon and Washington. It was founded in 1992 and provides business insurance, surety, employee benefits and personal insurance services to companies and individuals across the Northwest.

The acquisition will allow PayneWest’s more than 700 employees to join forces with MMA.

Following this deal, PayneWest will continue with its operations under MMA’s Northwest regional hub. Deals like this made MMA the most trusted broker of choice in this segment of the US market.

The transaction is in line with the company’s commitment to enhance its presence across the United States. It has been putting in efforts to cater to midsize organizations and individuals for the past many years.

This business line has been contributing strongly to the company’s overall growth for a while now.

The year 2020 was a record period for MMA with regard to acquired revenues since its establishment in 2009. As a case in point, MMA completed eight transactions in the same time frame, fetching in combined revenues of around $235 million. Constant buyouts poise the company well for long-term growth.

In January, MMA acquired Compass Financial Partners, a Greensboro, NC-based retirement consulting and investment advisory company. However, terms of the deal were not disclosed. Notably, its combined plan assets surpass $14 billion, which is added to Marsh & McLennan’s $50 billion worth of retirement assets.

Other Acquisitions in the Same Space

The last few months witnessed rigorous mergers and acquisitions in the insurance brokerage space, mainly attributable to the abundant capital availability.

In March, Arthur J. Gallagher & Co. AJG purchased South Bend, IN-based R&R Benefits to enhance its capabilities in Northern Indiana. We believe, R&R Benefits is a strategic fit for the acquirer as the transaction will strengthen and expand the latter’s capabilities throughout Northern Indiana.

In the first quarter of 2021, Brown & Brown, Inc.’s BRO subsidiary Brown & Brown of Ohio, LLC took over substantially all the Berry Insurance Group assets as well as O’Leary Insurances.

Aon plc. AON is also on course to close its Willis Towers Watson buyout in the first half of the current year. We believe that these consolidations will enable the companies to reinforce their capabilities as well as establish their footprints in various regions.

Zacks Rank and Share Price Performance

Shares of Marsh & McLennan have gained 41% in the past year, outperforming its industry’s growth of 36%.

The company has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report

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