Brown & Brown Strengthens Personal Line With Canopy Buyout

Brown & Brown, Inc.’s BRO subsidiary has purchased The Canopy Group. The addition of Canopy Group will boost Brown & Brown’s personal line business. 

Le Sueur, MN-based The Canopy Group is a multiline insurance agency focusing primarily on personal lines and commercial property and casualty for small businesses. It serves customer across Minnesota. Adding Canopy to the portfolio will not only expand BRO’s personal line business but also expand its small business commercial offerings.

Meanwhile, Canopy stands to gain from Brown & Brown’s extensive capabilities and market strength.

Brown & Brown’s strategic buyouts help it capitalize on growing market opportunities, strengthen its compelling products and service portfolio, expand global reach and accelerate its growth rate.  From 1993 through the second quarter of 2024, the insurance broker acquired 660 insurance intermediary operations. While BRO acquired four entities in the third quarter, this marked the first in the ongoing quarter.

Also, these strategic buyouts help Brown & Brown increase commissions and fees, which, in turn, drive revenues. Consistent operational results have been aiding Brown & Brown in generating solid cash flows for deployment in growth initiatives. 

Backed by sustained operational performance, Brown & Brown has maintained a strong liquidity position, which, in turn, allows the insurance broker to pursue buyouts to accelerate inorganic growth.

Shares of this Zacks Rank #3 (Hold) insurance broker have gained 17.5% in the past three months, outperforming the industry’s rise of 12.6%. A sustained operational performance, higher commissions and fees, and a sturdy capital position will help the broker retain the momentum.

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Acquisitions by Industry Players

Fidelity National Financial, Inc. FNF, through its majority-owned, publicly traded subsidiary F&G Annuities & Life, bought the commercial operations of First Nationwide Title Agency. This move marks FNF’s strategy to add companies to its portfolio, which will, in turn, help it better serve its commercial real estate clients.

Banking on operational expertise, FNF has a solid capital position that supports wealth distribution, mergers and acquisitions, organic growth initiatives and debt payments.

Arthur J. Gallagher & Co.’s AJG alternative risk and capital solutions subsidiary, Artex, recently acquired RIBV Holdings, LLC, and its subsidiaries, collectively doing business as Risk International. 

Arthur J. Gallagher is growing through mergers and acquisitions, most of which are within its Brokerage segment. AJG has a solid merger and acquisition pipeline with about 60 term sheets either agreed upon or being prepared, representing more than $550 million of annualized revenues. The insurer continues to expect an M&A capacity of $3.5 billion in 2024 and another $4 billion in 2025 without using any equity.

Marsh & McLennan Companies, Inc.’s MMC business, Marsh McLennan Agency, in September 2024, inked a deal to acquire McGriff Insurance Services, LLC for $7.75 billion in cash. 

Acquisitions form one of Marsh & McLennan's core growth strategies. Buyouts strengthen the company's capabilities, expand service offerings, enable the company to enter new geographies and solidify its foothold across existing markets.

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

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