MMC Buys Massachusetts-Based Firm - Analyst Blog

By Zacks | November 13, 2012 AAA

Last week, Marsh & McLennan Agency LLC ("MMA") announced that it has acquired The Protector Group Insurance Agency Inc. MMA is a subsidiary of Marsh Inc., which is a wholly-owned subsidiary of Marsh & McLennan Companies Inc. (MMC). MMA did not disclose the financial and other terms of the deal. The acquisition is a part of the subsidiary's ongoing efforts to develop a strong national platform. Toward this aim, it has already acquired 23 other companies since 2009.

Based in Worcester, Massachusetts, Protector Group deals in property & casualty insurance, employee benefits services, personal insurance and individual financial services. The 84-year old company is one of the leading independent agencies in New England. Apart from Worcester, it also has offices in Leominster and Wellesley in Massachusetts.

Protector Group is substantially smaller in size compared to MMA.  Protector Group's annual revenues are about $13.6 million, compared with $410 million of annualized revenues generated by MMA. Nevertheless, Protector Group has an impressive regional foothold and excellent management team, along with a balanced mix of property & casualty and employee benefits business.

Thus, the acquisition is projected to double the extent of MMA's market in the New England region. It is also expected to boost MMA's property & casualty insurance and employee benefits capacity. Moreover, it will augment the company's employee base with the entire leadership and 84 employees of Protector Group joining the acquiring company.

Earlier this month, MMA acquired Howalt+McDowell Insurance Inc., which is the biggest independent agency in South Dakota. In September 2012, MMA announced the acquisition of South Carolina-based employee-benefit oriented services provider Rosenfeld Einstein as well as Florida-based Eidson Insurance.

Marsh & McLennan currently carries a Zacks #3 rank (short-term Hold), which is supported by our long-term 'Neutral' recommendation. Peers Aon Plc (AON) and Accenture Plc (ACN) carry a Zacks #3 (Hold) and #2 (Buy) Ranks, respectively.

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