DUBLIN - Aon plc (NYSE: NYSE:AON), a global professional services firm, today announced an agreement to acquire Griffiths & Armour, a UK-based insurance broker. The transaction will result in Griffiths & Armour becoming a wholly-owned subsidiary of Aon UK Limited and will be marketed as "Griffiths & Armour, an Aon company" post-acquisition.
The acquisition is in line with Aon's strategy to expand its UK and Ireland presence, aiming to offer a wider range of solutions to clients by combining the strengths of both companies. Greg Case, CEO of Aon, expressed enthusiasm for the shared focus on client and colleague experiences and the contribution to Aon's global growth plan.
Griffiths & Armour, with approximately 200 employees, is recognized for its professional indemnity insurance expertise and general insurance broking services. Aon has committed to maintaining Griffiths & Armour's offices and team in Liverpool, Manchester, Dublin, and London.
Carl Evans, CEO of Professional Risks at Griffiths & Armour, described the acquisition as a strategic partnership to further the company's success and enhance its client services. Matt Donnelly, CEO of General Insurance for Griffiths & Armour, also welcomed the partnership, citing Aon's reputation for professionalism and client service.
Jane Kielty, UK CEO at Aon, praised Griffiths & Armour's business quality and growth potential. The transaction's closure is subject to regulatory approvals and is anticipated for the first quarter of 2025. Until then, both companies will continue to operate independently.
Aon provides risk, retirement, and health solutions, serving clients in over 120 countries. Griffiths & Armour specializes in risk management and insurance brokerage, serving various sectors and private clients.
This report is based on a press release statement from Aon plc.
In other recent news, Aon Corp has seen significant developments. The company's third-quarter financial results for 2024 revealed a 7% organic revenue growth and a significant 26% total revenue increase. Goldman Sachs (NYSE:GS) maintained a Neutral stance on Aon, while raising its price target to $390, reflecting Aon's organic growth prospects and management's positive outlook. The firm also increased its 2025 organic growth forecast for Aon by 0.4 percentage points to 5.6%, mainly due to stronger performance in Health and Reinsurance.
Simultaneously, RBC Capital adjusted its stock price target for Aon, reducing it from $390 to $365, while maintaining a Sector Perform rating. This adjustment followed Aon's recent acquisition of NFP, a leading insurance broker and consultant, which has begun to generate cost savings. Aon's management indicated that key performance indicators for NFP are meeting or surpassing initial projections.
Aon's successful integration of NFP played a key role in driving growth across various sectors, with the acquisition expected to generate $175 million in revenue synergies and $60 million in operational efficiencies by 2026. Despite an increase in interest expenses due to the NFP acquisition, Aon reported double-digit growth in Health Solutions across EMEA, Asia, and Latin America, and executed an $800 million share buyback. These are the latest developments in Aon's recent trajectory.
InvestingPro Insights
As Aon plc (NYSE: AON) moves to acquire Griffiths & Armour, a closer look at the company's financial metrics and market performance provides valuable context for this strategic expansion.
According to InvestingPro data, Aon boasts a substantial market capitalization of $79.34 billion, underlining its significant presence in the professional services sector. The company's revenue growth of 13.67% over the last twelve months, coupled with a robust quarterly revenue growth of 26.01% in Q3 2024, indicates a strong trajectory that supports its expansion strategy.
InvestingPro Tips highlight Aon's commitment to shareholder value, noting that the company "has raised its dividend for 13 consecutive years" and "has maintained dividend payments for 45 consecutive years." This consistent dividend policy may appeal to investors looking for stable returns alongside the company's growth initiatives.
The acquisition of Griffiths & Armour aligns with Aon's strong financial position. With an operating income margin of 25.28% and a gross profit margin of 46.86%, Aon demonstrates efficient operations that could potentially be leveraged to integrate and optimize the new acquisition.
It's worth noting that Aon is "trading at a high earnings multiple" and "trading at a high Price / Book multiple," according to InvestingPro Tips. While this might indicate investor confidence in the company's future prospects, it also suggests that the market has high expectations for Aon's performance and growth strategies, such as the Griffiths & Armour acquisition.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 9 more tips available for Aon, providing a deeper understanding of the company's financial health and market position.
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