Arthur J. Gallagher Expands In Canada, Boosts Portfolio
Zacks Investment Research | Jan 08, 2019 10:09PM ET
Arthur J. Gallagher & Co. (NYSE:AJG) has acquired Jones Brown Inc. and its subsidiaries to ramp up its commercial and personal insurance portfolio. The terms of the transaction have not been revealed.
Canada-based Jones Brown Inc. is a property/casualty insurance broker providing commercial and personal insurance from offices in Toronto and Hamilton, Ontario; Calgary, Alberta; and Vancouver, British Columbia. The addition of Jones Brown to Arthur J. Gallagher’s portfolio will help the latter serve clients better.
Buyouts not only expand geographical footprint but also strengthen a company’s portfolio. Arthur J. Gallagher has evolved over time and is now one of the top five global brokers. The company has been aggressively expanding outside the United States. Its recent acquisitions have helped it expand in New Zealand, Australia and United Kingdom.
Arthur J. Gallagher derives about one-third of its revenues from international operations. Given the number and size of its non-U.S. acquisitions, the Zacks Rank #4 (Sell) insurance broker expects international contribution to total revenues to increase. Also, Arthur J. Gallagher’s inorganic pipeline remains strong with about $500 million of revenues. The latest acquisition is the company’s third in the first quarter of 2019. Given its solid capital position, the company is well poised to pursue more strategic buyouts.
Shares of Arthur J. Gallagher have rallied 14% in a year, outperforming the Zacks Investment Research
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