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Marsh & McLennan (MMC) Unit to Buy J. Smith Lanier & Co.

Zacks Equity Research
Updated

Marsh & McLennan Agency LLC (MMA), the middle market agency subsidiary of Marsh & McLennan Companies, Inc. MMC, has announced that it will acquire J. Smith Lanier & Co. (JSL). Notably, J. Smith Lanier & Co. is one of the nation’s largest, privately held insurance brokerage firms.

Since 2009, the company has made more than 120 acquisitions and investments totaling more than $5 billion. In each of the last six years, the company’s consolidated underlying revenue has grown in the 3% to 5% range. Acquisitions have added two percentage points on average over that same time period.

The positive effects of numerous acquisitions and their synergistic effects are reflected in the company’s share price which is up 175.4% since 2009 to date, outperforming the gain of 107.7% logged by the Zacks categorised Insurance Brokers industry.

Coming back to the news, the terms of the deal were not disclosed. Upon completion, which is expected in the first quarter of 2017, JSL will operate as the unit’s Southeast regional hub.

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Other Deals

Recently, Mercer, a wholly owned subsidiary of the company announced that it has agreed to acquire Thomsons Online Benefits. It also acquired the businesses of Sirota Consulting LLC, a provider of business performance consulting, survey and employee engagement services and Pillar Administration.

Another unit, Marsh & McLennan Agency, recently acquired Benefits Resource Group, Presidio Benefits Group and Vero Insurance, Inc. Benefits Resource Group is an employee benefits consulting firm, San Francisco-based Presidio Benefits Group is an employee benefits consulting firm providing an array of employee benefits and human resource services in the Bay Area, and Vero Insurance offers insurance products and personal service to high net worth individuals, families and small businesses.

Yet another unit, global management consultancy Oliver Wyman, recently announced the purchase of LShift Limited, an independent software development company.

Marsh, another unit of the company inked a deal to acquire Bluefin Insurance Group Limited, a unit of AXA Group.

During the first half of 2016, the company used $168 million for acquisitions and has completed the takeover of New York-based insurance brokerage and human resource consulting firm Corporate Consulting Services Ltd; a leading aviation risk advisor Aviation Solutions LLC and one of Florida’s largest independent agencies Celedinas Insurance Group.

The company’s inorganic growth boosts investors’ confidence in the stock. Moreover, its investments are broad based and include geographic expansion, segmentation, and new capabilities and innovations. These poise the company for long-term growth.

Zacks Rank & Stocks to Consider

Marsh & McLennan carries a Zacks Rank #3 (Hold). Investors may consider players like W.R. Berkley Corp. WRB, Arch Capital Group Limited ACGL and OneBeacon Insurance Group, Ltd. OB. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

One Beacon Insurance delivered positive surprises in three of the last four quarters, with an average beat of 20.52%.

Arch Capital beat expectations in each of the last four quarters, with an average beat of 9.27%.

W. R. Berkley Corporation delivered positive surprises in three of the last four quarters, with an average beat of 3.77%.

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Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report
 
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