Brown & Brown's Unit Acquires Assets of Buiten & Associates
Brown & Brown, Inc.’s BRO subsidiary Brown & Brown of Michigan, Inc. has acquired considerably all Buiten & Associates’ assets.
About Buiten & Associates
Formed in 1935, Grand Rapids, MI-based Buiten & Associates is one of the largest insurance agencies in Western Michigan with more than 5,000 insurance and 1750 employee benefits clients worldwide. It represents over 50 highly rated insurance companies and has access to hundreds more through its national brokerage relationships.
It is a sales driven organization and it grows its firm to enhance its constituencies. It provides a wide array of insurance products and services to businesses and individuals across Michigan.
It specializes in the following types of business organizations: construction, education, health care, human services, manufacturing, main street, and restaurants
Rationale Behind the Deal
Buiten & Associates’ team has an impressive leadership quality and strong professional ethics. It is one of the premier independent agencies in Michigan. Thus, its addition will help Brown & Brown to strengthen its presence in Michigan.
As far as Buiten & Associates is concerned, this transaction will make them more responsive and help them to effectively meet the needs of their customers. Also, the capabilities and expertise of the acquirer will give Buiten & Associates’ team the opportunity to grow.
Inorganic Growth Story
Brown & Brown pursues buyouts for boosting top-line growth. Its revenues have grown as a result of its continued focus on net new business growth and acquisitions. Notably, this latest transaction marks the third buyout by the insurance broker in the third quarter of 2020. In the first six months of 2020, the insurer closed 10 transactions with estimated annual revenues of $85 million.
Consistent investments along with solid earnings will aid this Zacks Rank #2 (Buy) insurance broker in its inorganic efforts. These strategic acquisitions drive Brown & Brown’s commission and fees, which, in turn, boosts revenue growth.
From 1993 through the second quarter of 2020, it acquired 546 insurance intermediary operations. It continues to make investments to drive growth and margins.
Other Acquisitions in the Same Space
There have been a host of acquisitions in the insurance space of late, given the significant capital available. Recently, Arthur J. Gallagher & Co. AJG closed the buyout of Edmonton, Alberta-based Insight Insurance & Risk Management Ltd. Marsh & McLennan Companies’ MMC unit Oliver Wyman acquired a minority stake in Corridor Platforms and Aon plc AON completed the acquisition of 100% share capital of Farmington Administrative Services LLC and certain assets of other Farmington companies.
Price Performance
Shares of Brown & Brown have risen 28.5% in the past year, outperforming the industry’s increase of 7.4%. The company’s efforts to ramp up growth and capital position should continue to drive shares higher.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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