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Tickers in this Article: WSH, AJG, BRO, VR
Recently, a subsidiary of Brown & Brown Inc. (BRO) – Brown & Brown of New York Inc. has acquired some assets of The Rollins Agency Inc. in order to strengthen its New York operations.

As per the deal, Brown & Brown’s existing office will be relocated from the White Plains city of New York to The Rollin’s Agency office in Rye Brook, New York.

For over a century, The Rollins Agency has been responsible for providing insurance products ands services to the people of Westchester County, New York, Connecticut, New Jersey and the New York tri-state area. It has offered competent customer service to cater to the local community. Brown & Brown is expected to utilize this constructive approach of The Rollins Agency to expand its business in New York and beyond.

Besides insurance and reinsurance products, Brown & Brown provides a number of risk management, third-party administration and other services. The deal is expected to enhance the risk management capabilities of Brown & Brown and at the same time increase the clientele base of the company.

The Rollins Agency generates approximately $5.5 million in revenues annually. We expect the addition of this company to the operations of Brown & Brown to leverage the revenues of the latter and thereby bolster earnings. Once the company starts to reap the benefits, earnings are likely to exceed our present projection of $1.52 per share for full year 2013, which translates into a year-over-year improvement of 20.63%.

The company has undertaken a number of acquisitions in 2012 towards business expansion and has followed it up so far in 2013. In May, 2013, Brown & Brown inked a deal with an insurance and risk management broker Beecher Carlson Holdings Inc. pursuant to which it will acquire the company for a net consideration of $336.5 million. The deal is aimed at augmenting the insurance business of Brown & Brown and is expected to culminate in Jul 2013.


Brown & Brown currently carries a Zacks Rank #3 (Hold). Among others in the industry, Arthur J Gallagher & Co. (AJG), Validus Holdings Limited (VR) and Willis Group Holdings Public Limited Company (WSH) carry a favorable Zacks Rank #2 (Buy) and are worth considering.

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