Brown & Brown Agrees to Snap up Global Partners Limited

Brokerage firm Brown & Brown, Inc. (BRO) has agreed to acquire Global Risk Partners (GRP) insurance operations. The acquisition is expected to close in the third quarter of 2022, subject to closing conditions. The move helps BRO expand its presence, propel growth on a global scale and expand its market relationships.

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BRO delivers risk management solutions to individuals as well as businesses and has its presence across more than 300 locations in the U.S. and select markets globally. Meanwhile, GRP is one of the largest independent insurance intermediaries in the U.K. and operates retail broking, specialist MGA, network, and Lloyd’s businesses. The company generates about $340 million in annual revenue.

Following the acquisition, GRP will function within BRO’s retail segment and will continue to be led by its Global Chief Executive Officer Mike Bruce.

Management Weighs In

President and CEO of BRO, J. Powell Brown, commented, “We believe that aligning companies with common values will lead to shared success…GRP’s position as an industry leader in the U.K., their experience in international markets, and generation of new market segments will allow us to further expand our international footprint and broaden the scope of our global capabilities.”

Mike Bruce said, “This is a superb deal for GRP. Brown & Brown share a similar entrepreneurial ethos to us, and their ownership will bring a long-term perspective which opens up new opportunities for growth and provides the ideal springboard for continued strategic investment in GRP’s team and digital infrastructure.”

Additionally, last month BRO also announced the acquisition of Orchid Underwriters and Agency and CrossCover Insurance Services. The transaction is expected to close before April 2022.

Analysts’ Take

Yesterday, Wells Fargo analyst Elyse Greenspan reiterated a Hold rating on the stock alongside a price target of $66. Overall, the Street has a Moderate Buy consensus rating on BRO based on 3 Buys and 2 Holds. The average Brown & Brown price target of $72.80 implies a potential upside of 9.9% for the stock.

Hedge Fund Activity

According to TipRanks data points that Wall Street’s top hedge funds have decreased holdings in Brown & Brown by 134.7 thousand shares in the last quarter, indicating a negative hedge fund confidence signal in the stock based on activities of 6 hedge funds. Notably, Ray Dalio’s Bridgewater Associates has a holding worth ~$3.8 million in BRO. Shares are up 42.9% over the past 12 months.

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