Arthur J. Gallagher Grows In New Mexico With New Buyout

Arthur J. Gallagher & Co. (NYSE:AJG) recently acquired Santa Fe, New Mexico-based Reynolds & Rodar Insurance Group, Inc to expand its presence in New Mexico. The financial details of the transaction, however, remain under wraps.

Reynolds & Rodar is the oldest independent insurance agency in southwestern United States. The company offers a wide range of commercial property and casualty and employee benefits coverage to clients across New Mexico. It also offers high-net-worth personal lines coverage, commercial and home insurance services.

Post takeover, the insurer will continue to operate from its present location. It will be headed by Bret VanderVoort, chief of Gallagher's South Central retail property and casualty brokerage operations, and Norbert Chung, head of Gallagher's Western employee benefits consulting and brokerage operations.

This buyout is expected to expand the presence of the acquirer in New Mexico and enable it to enhance its property and casualty operations as well as employee benefits services. Further, Reynolds & Rodar’s in-depth expertise and diversified service range is expected to be highly accretive to the acquirer’s portfolio.

Arthur J. Gallagher has been pursuing strategic initiatives to widen its geographical footprint as well as to enhance its service portfolio. The company’s spectacular growth is driven by its organic sales, acquisition and mergers. Recently, the company had acquired DiBrina Group, to strengthen its existing foothold in Canada. This marks the second acquisition by the company in the ongoing quarter. A solid capital position continues to drive the company in its strategic endeavors.

Time and again, companies have resorted to mergers and acquisition activities to add capabilities to their portfolio. Earlier in October, White Mountains Insurance Group, Ltd. (NYSE:WTM) announced that it has entered into an agreement to acquire a 50% stake in DavidShield to gain a premier spot in the accident and health insurance market. Brown & Brown, Inc. (NYSE:BRO) via its affiliate, Pacific Resources Benefit Advisors, LLC, closed the buyout of all the assets of Universal Benefit Solutions, L.L.C. to deliver better employee benefit services.

Fidelity National Financial, Inc. (NYSE:FNF) announced that its FNF Group recently acquired a majority stake in SkySlope, Inc. to utilize the best of technology to provide quality services to real estate agents and brokers.

Zacks Rank & Share Price Movement

Arthur J. Gallagher carries a Zacks Rank #4 (Sell). Shares of Arthur J. Gallagher have underperformed the industry year to date. While Arthur J. Gallagher’s shares have returned 19.1%, the industry has rallied 23.7%. We expect the company’s diversified product offerings and strategic acquisitions to further drive its shares in the near term.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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