Canada Markets closed

Marsh & McLennan Expands in South Carolina

Zacks Equity Research

Expanding its operations in South Carolina, Marsh & McLennan Companies, Inc.’s (MMC) Marsh & McLennan Agency LLC (MMA.V) closed the acquisition of Greenville-based Capstone Insurance Services LLC for undisclosed terms and financial consideration.

MMA is a subsidiary of Marsh & McLennan’s leading insurance brokerage wing, Marsh Inc.

With revenues of $1.8 million, Capstone Insurance provides risk management solutions and property and casualty insurance to individuals and businesses in South Carolina. All of Capstone Insurance’s officials will join MMA’s Mid-Atlantic region and work out of MMA’s Greenville, SC office.

Following the acquisition, Capstone Insurance as part of Marsh & McLennan’s agency, can capitalize on MMA’s widespread resources and capabilities and grow in terms of providing better service to its clients.

On the other hand, this deal will help Marsh & McLennan to expand its insurance brokering coverage in South Carolina.

With the acquisition of Capstone Insurance, Marsh & McLennan has, to date, acquired about 50 firms since Nov 2009 within the insurance brokerage space. The latest buyout is yet another attempt by the company to maximize its manpower resources in a bid to expand its clientele.

The broad band of acquisitions over the past few years has strengthened Marsh & McLennan’s position as one of the dominant players in the industry. It is worth noting that despite the acquisition-related costs, the company has posted impressive results for 2013.

Overall, Marsh & McLennan’s focus on ramping up inorganic growth profile is well-aligned with its aim of delivering improved margins as well. Alongside, a healthy balance-sheet and adequate liquidity eliminates all significant risks from the company’s financial leverage.

Zacks Rank

Marsh & McLennan presently carries a Zacks Rank #2 (Buy). Other top-ranked stocks worth mentioning in the insurance sector are Alleghany Corp. (Y), AmTrust Financial Services, Inc. (AFSI) and Erie Indemnity Co. (ERIE). While Alleghany Corporation and AmTrust Financial sport a Zacks Rank #1 (Strong Buy), Erie Indemnity shares the same Zacks Rank as Marsh & McLennan.

Read the Full Research Report on MMC
Read the Full Research Report on ERIE
Read the Full Research Report on Y
Read the Full Research Report on AFSI

Zacks Investment Research