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Marsh & McLennan Companies, Inc.’s MMC unit Marsh McLennan Agency (MMA) recently completed the purchase of one of the biggest independent agencies in North Dakota, Vaaler Insurance, Inc. However, terms of the deal were kept under the wraps. MMA is the middle market arm of Marsh, which in turn, is part of the company’s Risk and Insurance Services segment.
Vaaler caters to business insurance, employee health and benefits, and personal lines solutions. The agency has a solid reputation in the region and is known for its excellent client service and unique insurance solutions.
With the market full of risks, it is the right time to take such strategic initiatives. Vaaler will be able to gain from MMA’s strength and a wide network.
Inorganic Growth Story
Acquisitions form one of the core growth strategies at this currently Zacks Rank #2 (Buy) company. The leading insurance broker made numerous purchases within its different operating units that enabled it to enter new geographies, expand within the existing locations, foray into new businesses, develop new segments and specialize within its current businesses. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It continued to build its arm Marsh & McLennan Agency LLC (MMA) through buyouts. The year 2020 marked a record phase for MMA with regard to acquired revenues since its establishment in 2009. MMA completed eight transactions last year fetching combined revenues of around $235 million.
On Apr 1, 2021, the company bought PayneWest, one of the largest independent agencies in the United States. The Risk and Insurance Services segment also acquired The Pryor Group, LLC, a Texas-based full-service broker providing business insurance with a specialty in quick service restaurants and the personal lines of franchise owners.
Shares of the company have gained 40.3% in a year's time, outperforming its industry's growth of 18.5%.
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Other Acquisitions in the Same Space
There has been a host of acquisitions in the insurance space of late, given its significant capital availability. In the second quarter of 2021, Brown & Brown, Inc. BRO acquired substantially all Piper Jordan assets.
Additionally, Alleghany Corporation’s Y wholly-owned subsidiary Alleghany Capital Corporation took over Wilbert, Inc. (WPS). In July, First American Financial Corporation FAF acquired Georgetown Title, which is expected to fortify First American Title Insurance Company’s presence in Williamson County and better serve customers with added services and resources.
Arthur J. Gallagher & Co. purchased Stellar Benefits Group, LLC and the remaining shares of Edelweiss Gallagher Insurance Brokers Limited.
The traditionally fragmented industry is well-poised for growth on the back of a slew of M&A activities taken up by the leading players.
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