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Arthur J. Gallagher’s (AJG) Buyout to Shore Up Canadian Base


Arthur J. Gallagher & Co. AJG recently acquired Sadbury, Ontario-based DiBrina Group. The financial details of the transaction, however, remain under wraps.

DiBrina Group is a placement consultant firm established in 1989. The company offers human resources, employee benefits, wealth management and life insurance consulting and brokerage services to its clients in Ontario. The company delivers consulting services in the fields of individual and corporate financial planning and human resources management with a special focus on employee benefits and pension plan administration.

Post takeover, DiBrina Group will continue to operate from its present location under the leadership of Leslie Lemenager, head of Gallagher's international employee benefit consulting and brokerage operations.

This new buyout by the insurance broker is expected to strengthen its existing foothold in Canada. Arthur J. Gallagher had earlier bought Canada-based GPL Assurance Inc, a retail insurance broker to consolidate its presence there.

DiBrina Group’s diverse service portfolio and expertise in human resource consulting are expected to be highly accretive to the acquirer’s portfolio. Further, this buyout is expected to enhance the acquirer’s human resource operations by combining group benefits, group retirement, human resource consulting and individual wealth management of DiBrina Group under one roof.

The insurance broker has been pursuing strategic initiatives to widen its geographical footprint as well as enhance to its portfolio. The company evolved from a small retail presence in Australia, Canada and New Zealand to one of the top five brokers globally. In its recent inorganic endeavor to drive growth, the company acquired Premier Insurance, LLC to boost its presence in southwest Florida. In the third-quarter of 2017, 11 acquisitions were made by the company.

The DiBrina Group buyout marks the first by the company in the ongoing quarter.A solid capital position continues to drive Arthur J. Gallagher to pursue strategic initiatives.

Zacks Rank & Share Price Movement

Arthur J. Gallagher carries a Zacks Rank #4 (Sell). Shares of Arthur J. Gallagher have outperformed the industry year to date. While Arthur J. Gallagher’s shares have returned 18.9%, the industry has grown 11.9%. We expect the company’s diversified product portfolio and strategic buyouts to further drive its shares.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Insurers Pursuing Inorganic Path

Time and again, companies have resorted to mergers and acquisitions to ramp up their growth profile.White Mountains Insurance Group, Ltd. WTM recently announced that it has entered into an agreement to acquire a 50% stake in DavidShield, to gain a premier spot in the accident and health insurance market AXIS Capital Holdings Limited AXS has acquired Novae Group plc’s shares at a price of 715 pence per share to ramp up its Llyods’ presence. Brown & Brown, Inc BRO via its subsidiary, Pacific Resources Benefit Advisors, LLC, closed the buyout of all assets of herronpalmer LLC to enhance its advisory and employee benefit services.

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