Brown & Brown, Inc. BRO has agreed to acquire the assets of HAUSER. The acquisition, following the fulfillment of certain closing conditions, is expected to be completed in September 2020.
Formed in 1971, this Cincinnati, OH-based Hauser is a full-service risk management, employee benefits and insurance solutions partner. It offers value-added support, resources and, expertise to clients and prospects with a specialized focus on the needs of private equity firms, their portfolio companies and target acquisitions.
It has significant experience in working with all transaction structures including control buyout, recapitalizations, minority investments, growth equity, mezzanine debt and special situations such as corporate carve-out assets and bankrupt entities.
Rationale Behind the Deal
HAUSER is well poised to provide services of initial due diligence and risk management solutions. With this acquisition, Brown & Brown will leverage the expertise and private equity focus of HAUSER to assist its collective customers.
As far as HAUSER is concerned, this transaction will boost its ability to cater to clients and private equity partners with insurance and risk management solutions.
Inorganic Growth Story
Brown & Brown pursues buyouts for boosting top-line growth. Notably, this transaction marks the second 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, boost revenue growth.
Brown & Brown maintains a disciplined focus on acquiring companies that are strategic fits. The company has acquired 500 insurance intermediary operations in more than two decades. 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.
Shares of Brown & Brown have risen 27.2% in the past year, outperforming the industry’s increase of 6.6%. The company’s efforts to ramp up growth and its solid capital position should continue to drive shares higher.
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