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Arthur J. Gallagher (AJG) Purchases Burkwald & Associates

Arthur J. Gallagher & Co.AJG has acquired Burkwald & Associates, Inc. to boost its Employee Benefits Consulting business. However, the terms of the transaction remained undisclosed. With this buyout, company's year-to-date acquisition tally reaches 25.

Founded in 1978, Burkwald & Associates is a Pewaukee, WI-based employee benefits and management consulting firm. The company offers a wide range of group employee benefits consulting services and products to their public entity and commercial clients across the Midwest. Additionally, the company specializes in providing strategic planning, employee communications, employee benefits, wellness and education products and services.

Post acquisition, Burkwald & Associates' employees will continue to work from its present location. They will, however, report to the head of Arthur J. Gallagher's North Central employee benefit consulting and brokerage business unit.

The acquisition complements Arthur J. Gallagher's strong sales culture. Also, the high-quality client service Burkwald & Associates will benefit the insurer. The acquirer's expanding employee benefits brokerage and consulting business will also be boosted by the takeover. This is because Burkwald & Associates specializes in providing benefits and consulting services to the emerging business requirements of its clients.

The insurance broker has been consistently boosting its inorganic growth profile through buyouts. The company added five new entities to its portfolio in the third quarter of this year. Notably, the company had acquired 13 entities during the same period in 2014. The company's solid liquidity position cushions its growth initiatives. Therefore, the company is likely to make more such purchases, going forward.

Arthur J. Gallagher's compelling inorganic growth and strategic focus on global expansion will likely prompt a revision in earnings estimates and hence, possibly a rank upgrade. Currently, the insurance broker carries a Zacks Rank #3 (Hold).

Following the inorganic route to ramp up one's operational profile seems to be a well-accepted strategy among insurers as acquisitions rage this space. Last month, Sun Life Financial Inc. SLF completed the takeover of Bentall Kennedy Group. Also, United Insurance Holdings Corp. UIHC entered into an agreement to acquire all the shares of Interboro Insurance Company to enrich its insurance portfolio. AmTrust Financial Services, Inc. AFSI also inked a deal to acquire Republic Companies, Inc. and its affiliates to complement its property & casualty as well as service and fees business.

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GALLAGHER ARTHU (AJG): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

SUN LIFE FINL (SLF): Free Stock Analysis Report

UTD INSURANCE (UIHC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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