Striding on an acquisition spree,
Marsh & McLennan Cos Inc.
) Marsh & McLennan Agency LLC (MMA) announced the acquisition
of Michigan-basedCambridge Property & Casualty (P&C) for
an undisclosed terms and financial consideration.
Apparently, markets remained indifferent of the event, as the
stock price of Marsh & McLennan dipped marginally by 0.4% to
$47.22 on Dec 4. MMA is a subsidiary of Marsh & McLennan's
leading insurance brokerage wing - Marsh Inc.
Armed with annual revenues of $6 million and a staff strength
41, Cambridge has been offering insurance and risk management
services to the high net-worth individuals (HNIs) and to other
mid-sized businesses since 1974.
Further, the acquisition will allow Cambridge to maintain its
existing business model and work culture, while also add to its
technical expertise and vast resources that were inaccessible to
the firm until now. It will also complement the strategic benefit
consulting services provided to mid-size organizations by McGraw
Wentworth in Michigan, which was acquired by MMA in Jan 2013.
On the other hand, this deal will help Marsh & McLennan to
expand its insurance brokering coverage by consolidating
individual outperforming agencies across the upper Midwest.
Cambridge also brings along superior clientele and excellent
With the acquisition of Cambridge, Marsh has, to date,
acquired about 33 firms since Nov 2009 within the insurance
brokerage space. The latest acquisition is yet another attempt by
Marsh & McLennan to maximize its manpower resources in order
to expand its clientele.
The broad band of acquisitions over the past few years has
strengthened Marsh & McLennan's position as one of the
dominant players in its industry. Moreover, despite the
acquisition-related costs, Marsh & McLennan has posted
impressive results for the most of 2012 and 2013.
Overall, Marsh & McLennan's focus on boosting inorganic
growth is well-aligned with delivering improved margins as well.
Alongside, a healthy balance-sheet and adequate liquidity
eliminates all significant risks from the company's financial
Marsh & McLennan currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the insurance sector include
Hilltop Holdings Inc.
Montpelier Re Holdings Ltd.
CNA Financial Corp.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
CNA FINL CORP (CNA): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
To read this article on Zacks.com click here.