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Arthur J. Gallagher (AJG) Buys Remainder of Hesse & Partner
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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired the remaining shares of Hesse & Partner AG and Hesse Consulting GmbH from founder, Guido Hesse. Terms of the transaction were kept under wraps. Arthur J. Gallagher had formed the partnership with Hesse and Partner three years ago when it acquired a majority interest in the business.
Founded in 1997, Zurich, Switzerland-based Hesse and Partner is focused on providing risk management and insurance solutions to the companies in the industrial and service provider sectors, with expertise in the growing waste-to-energy sector.
This acquisition will fortify the acquirer’s presence in Europe. Further, this transaction will boost the insurance services of Arthur J. Gallagher.
Inorganic Growth Story
Acquisitions enable Arthur J. Gallagher to expand into desirable geographic locations, extend its presence in retail and wholesale insurance and reinsurance brokerage services markets, and increase the volume of general services currently provided. Its inorganic pipeline remains strong, with around $250 million of annualized revenues associated with 40 term sheets signed or being prepared.
In the first quarter, the insurance broker completed five brokerage mergers, representing about $90 million of estimated annualized revenues. So far this year, it has made 14 acquisitions. Revenue growth rates have generally been 5-15% for 2021 acquisitions. The buyouts provide the company with incremental capabilities and services to assist clients across Australia, the U.K., Europe and the United States. The company remains focused on its long-term growth strategies of delivering organic revenue growth, and pursuing mergers and acquisitions.
Other Acquisitions in the Same Space
There have been a host of acquisitions in the insurance space of late, given significant capital availability. In the ongoing second quarter of 2021, Brown & Brown, Inc. (BRO - Free Report) acquired substantially all Piper Jordan assets. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (“MMA”) recently acquired PayneWest Insurance, one of the largest independent agencies in the United States. Alleghany Corporation’s wholly-owned subsidiary Alleghany Capital Corporation acquired Wilbert, Inc. (WPS).
Price Performance
Shares of Arthur J. Gallagher have gained 46.9% in a year, outperforming the industry’s increase of 36.6%. Efforts to ramp up the company’s growth profile and capital position should help shares retain the momentum.
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Arthur J. Gallagher (AJG) Buys Remainder of Hesse & Partner
Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired the remaining shares of Hesse & Partner AG and Hesse Consulting GmbH from founder, Guido Hesse. Terms of the transaction were kept under wraps. Arthur J. Gallagher had formed the partnership with Hesse and Partner three years ago when it acquired a majority interest in the business.
Founded in 1997, Zurich, Switzerland-based Hesse and Partner is focused on providing risk management and insurance solutions to the companies in the industrial and service provider sectors, with expertise in the growing waste-to-energy sector.
This acquisition will fortify the acquirer’s presence in Europe. Further, this transaction will boost the insurance services of Arthur J. Gallagher.
Inorganic Growth Story
Acquisitions enable Arthur J. Gallagher to expand into desirable geographic locations, extend its presence in retail and wholesale insurance and reinsurance brokerage services markets, and increase the volume of general services currently provided. Its inorganic pipeline remains strong, with around $250 million of annualized revenues associated with 40 term sheets signed or being prepared.
Arthur J. Gallagher currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the first quarter, the insurance broker completed five brokerage mergers, representing about $90 million of estimated annualized revenues. So far this year, it has made 14 acquisitions. Revenue growth rates have generally been 5-15% for 2021 acquisitions. The buyouts provide the company with incremental capabilities and services to assist clients across Australia, the U.K., Europe and the United States. The company remains focused on its long-term growth strategies of delivering organic revenue growth, and pursuing mergers and acquisitions.
Other Acquisitions in the Same Space
There have been a host of acquisitions in the insurance space of late, given significant capital availability. In the ongoing second quarter of 2021, Brown & Brown, Inc. (BRO - Free Report) acquired substantially all Piper Jordan assets. Marsh & McLennan Companies, Inc.’s (MMC - Free Report) unit Marsh & McLennan Agency LLC (“MMA”) recently acquired PayneWest Insurance, one of the largest independent agencies in the United States. Alleghany Corporation’s wholly-owned subsidiary Alleghany Capital Corporation acquired Wilbert, Inc. (WPS).
Price Performance
Shares of Arthur J. Gallagher have gained 46.9% in a year, outperforming the industry’s increase of 36.6%. Efforts to ramp up the company’s growth profile and capital position should help shares retain the momentum.
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
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