We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arthur J. Gallagher Boosts Brokerage Operations With Buyout
Read MoreHide Full Article
Arthur J. Gallagher & Co. (AJG - Free Report) has recently acquired Thomas Costello Insurance Agency, Inc. to bolster its retail property/casualty brokerage operations and employee benefits consulting services. The company also intends to reinforce its presence in Los Angeles and the San Fernando Valley with the buyout. However, financial details of the transaction were kept under wraps.
Details of the Transaction
Established in 1990, Simi Valley CA-based Thomas Costello operates as a retail property/casualty as well as an employee benefits consultant and broker, catering to clients throughout Southern California. The company, offering personal and commercial coverage, has built a reputation for itself over a significant period of time. After the completion of the buyout, the company will continue to operate from its current office location.
The latest acquisition is anticipated to strengthen the already robust inorganic growth portfolio of the acquirer. The team at Costello displays solid strength in meeting the specific needs of its clients and also boasts a proven expertise in its field as well as sturdy market relationships. Consequently, it is anticipated to be highly value accretive to Arthur J. Gallagher’s expanding operations in the Southwest region of the United States. With this buyout, the insurance broker will be able to reinforce its footprint as the largest broker in Los Angeles and San Fernando Valley area.
Arthur J. Gallagher’s prudent acquisitions bear testimony to its inorganic growth strategy. The insurance broker remains optimistic about its capability to attract acquisition partners in its typical small tuck-in size at fair prices.
Over the past few years, Arthur J. Gallagher’s impressive growth has been primarily fueled by organic sales as well as judicious buyouts and mergers. The company has been focusing on its acquisition activity in the retail employee benefits brokerage and wholesale brokerage areas. Its merger and acquisition pipeline remains strong with about $400 million of revenues. Further, driven by the number and size of non-U.S. buyouts, international contribution to total revenues is expected to improve.
Zacks Rank and Share Price Movement
Arthur J. Gallagher carries a Zacks Rank #4 (Sell). However, shares of the company have rallied 16.0% in a year’s time, outperforming the industry’s rise of 5.9%. We expect top-line growth, prudent acquisitions and a robust capital position to drive the shares higher in the near term. Notably, the company’s long-term earnings growth is pegged at 11.80%, better than the industry’s increase of 11.50%.
Other Acquisitions in the Insurance Space
We have observed that insurers have been adopting the inorganic route to strengthen portfolio. The insurance industry is grabbing attention of late with a flurry of acquisitions on the back of its available capital resource which remains at an all-time high.
Recently, Alleghany Capital Corporation, which is a wholly-owned subsidiary of Alleghany Corporation , revealed that its unit Jazwares, LLC has purchased Russ Berrie and Applause brands. Also, Brown & Brown, Inc.’s (BRO - Free Report) unit Brown & Brown of Kentucky, Inc. recently purchased almost all the assets of Automotive Development Group, LLC.
In April, White Mountains Insurance Group, Ltd. (WTM - Free Report) inked a deal to buy a majority equity stake in NSM Insurance.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Arthur J. Gallagher Boosts Brokerage Operations With Buyout
Arthur J. Gallagher & Co. (AJG - Free Report) has recently acquired Thomas Costello Insurance Agency, Inc. to bolster its retail property/casualty brokerage operations and employee benefits consulting services. The company also intends to reinforce its presence in Los Angeles and the San Fernando Valley with the buyout. However, financial details of the transaction were kept under wraps.
Details of the Transaction
Established in 1990, Simi Valley CA-based Thomas Costello operates as a retail property/casualty as well as an employee benefits consultant and broker, catering to clients throughout Southern California. The company, offering personal and commercial coverage, has built a reputation for itself over a significant period of time. After the completion of the buyout, the company will continue to operate from its current office location.
The latest acquisition is anticipated to strengthen the already robust inorganic growth portfolio of the acquirer. The team at Costello displays solid strength in meeting the specific needs of its clients and also boasts a proven expertise in its field as well as sturdy market relationships. Consequently, it is anticipated to be highly value accretive to Arthur J. Gallagher’s expanding operations in the Southwest region of the United States. With this buyout, the insurance broker will be able to reinforce its footprint as the largest broker in Los Angeles and San Fernando Valley area.
Arthur J. Gallagher’s prudent acquisitions bear testimony to its inorganic growth strategy. The insurance broker remains optimistic about its capability to attract acquisition partners in its typical small tuck-in size at fair prices.
Over the past few years, Arthur J. Gallagher’s impressive growth has been primarily fueled by organic sales as well as judicious buyouts and mergers. The company has been focusing on its acquisition activity in the retail employee benefits brokerage and wholesale brokerage areas. Its merger and acquisition pipeline remains strong with about $400 million of revenues. Further, driven by the number and size of non-U.S. buyouts, international contribution to total revenues is expected to improve.
Zacks Rank and Share Price Movement
Arthur J. Gallagher carries a Zacks Rank #4 (Sell). However, shares of the company have rallied 16.0% in a year’s time, outperforming the industry’s rise of 5.9%. We expect top-line growth, prudent acquisitions and a robust capital position to drive the shares higher in the near term. Notably, the company’s long-term earnings growth is pegged at 11.80%, better than the industry’s increase of 11.50%.
Other Acquisitions in the Insurance Space
We have observed that insurers have been adopting the inorganic route to strengthen portfolio. The insurance industry is grabbing attention of late with a flurry of acquisitions on the back of its available capital resource which remains at an all-time high.
Recently, Alleghany Capital Corporation, which is a wholly-owned subsidiary of Alleghany Corporation , revealed that its unit Jazwares, LLC has purchased Russ Berrie and Applause brands. Also, Brown & Brown, Inc.’s (BRO - Free Report) unit Brown & Brown of Kentucky, Inc. recently purchased almost all the assets of Automotive Development Group, LLC.
In April, White Mountains Insurance Group, Ltd. (WTM - Free Report) inked a deal to buy a majority equity stake in NSM Insurance.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>