AON Seals Townsend Acquisition, Boosts Investment Business

Aon plc (NYSE:AON) recently completed the acquisition of Townsend Group, which provides advisory service on $175.7 billion in global assets and manages $14.5 billion in assets.

The deal, announced in September 2017, cost the company $475 million in cash.

How Would the Buyout Aid Aon?

Townsend seems to be an attractive fit for Aon’s investment business, which currently manages more than $100 billion of worldwide assets and advises on $4.2 trillion of assets for more than 2,500 clients around the world.

Townsend is a leading provider of global investment management and advisory services with primary focus on real estate. Its client base comprises many of the world's leading global investors in North America, Asia, Europe and the Middle East. Hence, this buyout is expected to strengthen Aon's presence in the real estate industry while providing it a wider global exposure.

Moreover, Townsend's investment management expertise is expected to enhance Aon’s investment capabilities, which include outsourced chief investment officer services and advisory services for large and mid-sized global organizations.

Inorganic Growth Story

Aon has been taking several inorganic growth initiatives to sharpen its focus on delivering advice and solutions, and expand its global footprint. This acquisition is the most recent instance of its commitment to allocate capital to high-value solutions to address emerging client needs.

Share Price Movement

Shares of the company have rallied 17.7% in a year’s time, outperforming the industry’s rise of 15.8%.

Zacks Rank and Stocks to Consider

Aon has a Zacks Rank #4 (Sell).

Investors can consider some better-ranked stocks in the insurance space like Manulife Financial Corporation (NYSE:MFC) Primerica, Inc. (NYSE:PRI) and Cigna Corporation (NYSE:CI) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Manulife Financial provides financial advice, insurance, and wealth and asset management solutions for individuals, groups and institutions in Asia, Canada and the United States. The company came up with positive surprises in each of the last four quarters with an average beat of 10.75%.

Primerica distributes financial products to middle-income households in the United States and Canada. The company pulled off positive surprises in two of the last four quarters with an average beat of 0.96%.

Cigna provides insurance and related products and services in the United States and internationally. The company delivered positive surprises in each of the trailing four quarters with an average beat of 14.56%.

Wall Street’s Next Amazon (NASDAQ:AMZN)

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>