Published on 24 May 2024 on Zacks via Yahoo Finance
Arthur J. Gallagher's (AJG) Unit Adds CCI Surety to Portfolio
Arthur J. Gallagher & Co. AJG announced that Risk Placement Services, Inc., its U.S. wholesale brokerage, binding authority and programs division, acquired CCI Surety, Inc. The acquisition will consolidate the acquirer’s presence in wholesale surety and boost its portfolio.Golden Valley, MN-based CCI Surety is a managing general underwriter specializing in wholesale contract and commercial surety bonds for retail agents throughout the United States.Arthur J. Gallagher has an impressive inorganic story with buyouts in the Brokerage and Risk Management segments. This Zacks Rank #3 (Hold) insurance broker acquired 12 entities totaling $69.2 million of estimated annualized revenues in the first quarter of 2024. Arthur J. Gallagher is growing through mergers and acquisitions, most of which are within its Brokerage segment. AJG has a solid merger and acquisition pipeline with about 50 term sheets either agreed upon or being prepared, representing more than $350 million of annualized revenues.A solid capital position ensuring continuous cash inflow supports AJG in its growth initiatives. It remains focused on continuing its tuck-in mergers and acquisitions. AJG continues to expect M&A capacity of $3.5 billion in 2024 and another $4 billion in 2025 without using any equity.Arthur J. Gallagher’s long-term growth strategies should help it deliver organic revenue improvement and pursue strategic mergers and acquisitions. AJG is focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future. Shares of Arthur J. Gallagher have gained 11.4% year to date, outperforming the industry’s 8.2% increase. Solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities and effective capital deployment should continue to drive share price higher.
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