Arthur J. Gallagher Snaps up LDJ American Online Benefits Group

Global insurance brokerage, risk management, and consulting services provider Arthur J. Gallagher & Co. (AJG) has acquired LDJ American Online Benefits Group (AOBG). Acquisition terms were not disclosed.

AOBG has a network of 2,500 agents across the U.S. The company provides supplemental health insurance and wellness products.

AJG Chairman, President, and CEO J. Patrick Gallagher, Jr., said, “AOBG’s specialized expertise and product offerings serve the needs of individuals who typically don’t have access to employer group benefits, such as self-employed, retired, and gig-economy workers. Their offerings complement and expand our strengths in the affinity market.” (See Arthur J. Gallagher stock analysis on TipRanks)

Post-acquisition, AOBG will function under the guidance of Gallagher’s head of North American Affinity operations, Kevin Garvin.

On May 21, Merrill Lynch analyst Joshua Shanker initiated coverage of AJG with a Sell rating and a price target of $133, implying a 9.3% downside potential.

Shanker believes that AJG is in a good position in the insurance industry amid M&A activity and is on the path to be “truly global”. Nevertheless, the analyst views the market as having already incorporated these factors in AJG’s current valuation.

Consensus among analysts is that AJG is a Moderate Buy based on 5 Buys, 3 Holds, and 1 Sell. The average analyst price target of $154 implies 5% upside potential. Shares have gained about 55.2% over the past year.

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