Striding on an acquisition spree, yesterday
Marsh & McLennan Companies Inc.
) Marsh & McLennan Agency LLC (MMA) announced the acquisition
of Michigan-based McGraw Wentworth for an undisclosed terms and
financial consideration. MMA is a subsidiary of Marsh &
McLennan's leading insurance brokerage wing - Marsh Inc.
With $15 million of annual revenue and 72 employees, McGraw
Wentworth offers an array of strategic benefit consulting
services to mid-size organizations. These include manufacturers,
automotive suppliers, financial services, non-profit
establishments, public schools and local municipalities.
Further, the acquisition will allow McGraw Wentworth to
maintain its existing business model and work culture but add to
its technical expertise and vast resources that was inaccessible
to the firm until now. On the other hand, this deal will help
Marsh & McLennan to expand its employee benefits coverage by
consolidating individual outperforming agencies across the upper
Mid-west of the US.
MMA has also bolstered its operations in the region with the
acquisition of Minnesota-based Liscomb Hood Mason Co. last week.
The company has also acquired Ohio-based Brower Insurance Agency
and the employee division of Dallas-based Independent Insurance
Group last month. The latest acquisition is yet another attempt
by Marsh & McLennan to maximize its manpower resources in
order to expand its clientele.
Following the acquisition of McGraw Wentworth, MMA acquired
about 27 firms since November 2009. The broad band of
acquisitions over the past few years has strengthened Marsh &
McLennan's position as a dominant player in its industry, quite
closer to the leading
Moreover, despite the acquisition-related costs, Marsh &
McLennan has posted impressive results for the most of 2012. The
company's focus on boosting inorganic growth is well-correlated
with delivering positive financial results as well. Alongside, a
healthy balance-sheet and adequate liquidity eliminates 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.
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