Marsh & McLennan Companies, Inc.
) Marsh & McLennan Agency LLC (MMA) announced the acquisition
of Minnesota-based Liscomb Hood Mason Co., in order to expand its
employee benefits coverage. However, the terms and financials of
the deal remain concealed. MMA is a subsidiary of Marsh &
McLennan's leading insurance brokerage wing - Marsh Inc.
Armed with $2.2 million in annual revenue, Liscomb Hood Mason
has been offering a wide-range of property-casualty and employee
benefit products and services in the region since 1927.
Meanwhile, the acquisition will help Marsh & McLennan
penetrate deeper into the upper Mid-west region of the U.S.
Last month, the company also acquired Ohio-based Brower
Insurance Agency and the employee division of Dallas-based
Independent Insurance Group, which further reflects Marsh &
McLennan's focus on this regional expansion. The latest
acquisition is another attempt by Marsh & McLennan to
maximize its manpower resources in order to expand its
Marsh & McLennan's MMA has been following the strategy of
growth through acquisitions, over the last couple of years. This
strategy has not only helped the company grow inorganically but
is also showing positive results on the financials. Following the
acquisition of Liscomb Hood Mason, MMA acquired about 26 firms
since November 2009. This broad band of acquisitions also
strengthens Marsh & McLennan's position as a dominant player
in its industry, closer to the leading
Moreover, despite the acquisition-related costs, Marsh &
McLennan posted impressive results in the first nine months of
2012 on account of top-line growth in all lines of businesses,
lower operating expenses and higher investment income. Even the
unutilized $1.0 billion revolving credit facility along with
expected tax benefits in the upcoming quarters shall provide
cushion to the company's liquidity, thereby eliminating any
significant risk from the company's financial leverage.
Overall, as a leading global broker, Marsh & McLennan has
a history of outperforming its peers banking on its size, diverse
product offering, global presence and technical expertise. We
believe that the company has the ability to remain focused on
this growth approach with a prudent management, thereby driving
the earnings in the future as well.
Currently, Marsh & McLennan carries a long-term Neutral
recommendation and a Zacks #3 Rank (Hold) in the short term.
AON PLC (AON): Free Stock Analysis Report
MARSH &MCLENNAN (MMC): Free Stock Analysis
To read this article on Zacks.com click here.