Although shares of
Brown & Brown Inc.
) dropped 0.4% to $30.67 over the last two trading sessions, the
asset acquisition of Gaston & Associates is now making
headlines. This dip in stock price can be attributed to broader
market conditions. The acquisition was carried out by a subsidiary
of Brown & Brown, namely Brown & Brown of New York, Inc.
Gaston & Associates is a renowned entity in the property and
casualty, and employee benefits insurance space. With more than a
century-old presence, the firm has an impressive history of serving
residents of New York and the Northeastern United States.
As per the terms of the deal, Frederick K. Gaston, the majority
shareholder of the acquired entity and his team will operate from
the Rye Brook, NY location of Brown & Brown. Brown &
Brown's Markham F. Rollins, III will head the whole body.
Through the aforementioned transaction, Brown & Brown intends
to utilize Gaston's expertise in risk management to enhance its
capacities as a financial services provider. Here, it is
worth mentioning that Gaston's remarkable performance is reflected
in its annual revenue generation of $2.4 million. Notably, there
are certain subsidiaries of Brown & Brown that offer a number
of risk management services. Hence, the acquisition will enable it
to capitalize on Gaston's resources to boost its risk management
Brown & Brown has been upfront in its merger and acquisition
activities. This strategy plays a significant role in the company's
success. In fact, Brown & Brown has undertaken more than 250
M&A or contract extensions with existing partners over the last
fourteen years. The latest deal is another such endeavor by the
company that we believe will help it perform impressively going
forward. Therefore, we expect the company's long-term growth to be
Currently, Brown & Brown has a Zacks Rank #3 (Hold). However,
better-ranked players in the industry that look attractive at the
current levels include
Erie Indemnity Company
). All these stocks carry a Zacks Rank #2 (Buy).
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