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Arthur J. Gallagher Adds The MW Bangall to its Portfolio

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Arthur J. Gallagher & Co.AJG recently acquired The MW Bagnall Company to enhance and extend its employee benefits consulting and brokerage services in the Southwestern region of the U.S. The transaction amount remained undisclosed.

Phoenix, AZ-based The MW Bangall was established in 1995. The employee benefits broker and human resource consulting firm caters to middle and larger-market businesses across the Southwestern region of the U.S. The acquired company primarily focuses on building strategic plans and designing customized benefit programs. In addition, The MW Bangall offers wellness and human resource consulting services to its private and public sector clients.

We believe that the buyout would further boost the already robust inorganic growth portfolio of the acquirer. Post takeover, The MW Bangall will continue to operate from its current location.

Particularly, we expect The MW Bangall's in-depth expertise, outstanding market relationships and quality service to be highly value accretive to Arthur J. Gallagher's client portfolio. In addition, the The MW Bangall's team-based sales culture and Southwestern U.S. foothold will complement the acquirer's insurance brokerage services.

Notably, this marks the 24th takeover by the company this year. Last month, Arthur J. Gallagher acquired London-based Argentis for an undisclosed amount. The buyout will enable the company to boost its growing U.K. employee benefits consulting and brokerage operations.

Arthur J. Gallagher is known for improving its growth profile through prudent acquisitions. Most of the buyouts by this company are within the brokerage segment. This apart, Arthur J. Gallagher has increased purchases in the retail employee benefits brokerage and wholesale brokerage sectors. The brokerage service provider intends to pursue smaller tuck-in mergers in 2017.

However, shares of Arthur J. Gallagher gained 22.7% year to date, underperforming the Zacks categorized Insurance Broker industry's growth of about 25%.

Nonetheless, substantial improvement, both in the bottom line and top line, along with a robust liquidity position backed by strong cash flow generation, are expected to help the stock turn around in the near future. Further, a strong capital position has not only helped increased the company's shareholder value but also enabled the life insurer to invest in prudent initiatives, which in turn, has accelerated growth.

Stocks to Consider

Some better-ranked stocks from the insurance industry include Alleghany Corporation Y , NMI Holdings, Inc. NMIH and Arch Capital Group Ltd. ACGL . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.

NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.

Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.

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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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