Expanding its employee benefits coverage,
Marsh & McLennan Companies Inc.
's (
MMC
) Marsh & McLennan Agency LLC (MMA) announced the acquisition
of a leading Ohio-based Brower Insurance Agency. 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 $24 million in annual revenue, Brower Insurance
taps middle market organizations and individuals to offer an
array of employee benefits, property-casualty and consulting
services. Following the acquisition, all of the 164 employees of
Brower Insurance will be integrated with MMA to serve the
mid-West regions. The latest acquisition is another attempt by
Marsh & McLennan to maximize its manpower resources in order
to expand its clientele base.
Marsh & McLennan's MMA has been following the strategy of
growth through acquisitions, over the last couple of years. Last
month, MMA acquired Massachusetts-based Protector Group and South
Dakota-based Howalt+McDowell Insurance Inc. Following the
acquisition of Rosenfeld Einstein, MMA acquired about 24 firms
since November 2009.
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 and higher
investment income. Even lower operating expenses have supported
margin growth. In addition, a stable outlook affirmation from the
ratings agencies boosts the optimism about Marsh & McLennan's
credibility and operating leverage.
While the company is able to concentrate on its core
efficiencies, Marsh & McLennan's 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.
Despite the sluggish organic growth, the company is still a
dominant player in its industry, quite next to the leading
Aon Corp.
(
AON
).
Currently, Marsh & McLennan carries a long-term Neutral
recommendation and a Zacks Rank #3, which translates into a
short-term Hold rating.
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