Arthur J. Gallagher Buys Williams-Manny Insurance Group

Arthur J. Gallagher & Co. (NYSE:AJG) recently acquired Williams-Manny Insurance Group to add capabilities to its compelling portfolio. The terms of the deal remained undisclosed.

Rockford based Williams-Manny Insurance Group was founded in 1896. The company provides retail insurance brokerage and employee benefits consultancy services to corporate and individual clients across Northern Illinois. It largely focusses on construction, manufacturing, higher education and nonprofit accounts.

The buyout is expected to help the acquirer fortify its footprint in Northern Illinois and boost growth capacity. Post acquisition, Williams-Manny Insurance Group will continue to operate from its current location under the leadership of acquirer’s executives.

Arthur J. Gallagher has put the steam behind its acquisition activity in retail employee benefits as well as wholesale brokerage areas and thus eyes smaller tuck-in mergers in 2017. The broker’s merger and acquisition pipeline remains strong with $350 million of revenues.

Arthur J. Gallagher pursues strategic acquisitions that not only strengthen its portfolio but also add a cap of competence to it. The company’s impressive growth is driven by organic sales, acquisition and mergers.

Buyouts not only widen the company’s geographical footprints but also enhance its portfolio of services. Furthermore, such deals consolidate its position in retail and wholesale insurance brokerage services and risk management industries.

This is the sixth buyout of the company in current quarter. While Arthur J. Gallagher had made 10 acquisitions in the year-ago quarter, the insurance broker closed 12 acquisitions with annualized revenues of over $62.5 million in the last quarter.

Shares of Arthur J. Gallagher have inched up 0.34% quarter to date, underperforming the Zacks categorized Insurance Broker industry’s 6.14% increase. Nonetheless, the company’s focus on international expansion, ramping up growth profile and strong capital position should drive the shares higher.

Arthur J. Gallagher carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks from the insurance industry are eHealth, Inc. (NASDAQ:EHTH) , Aon plc (NYSE:AON) and ProAssurance Corporation (NYSE:PRA) .

eHealth provides private online health insurance services in the United States and China. The company posted a 596.15% positive surprise in the last reported quarter. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aon offers risk management services, insurance and reinsurance brokerage, human resource consulting and outsourcing services worldwide. The company posted 13.28% positive surprise in the last reported quarter. The stock carries a Zacks Rank #2 (Buy).

ProAssurance provides property and casualty insurance besides reinsurance products in the United States. The company posted a 12.72% positive surprise in the last reported quarter. The stock carries a Zacks Rank #2.

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