Gallagher pads M&A pipeline; 40 targets now in crosshairs

Global insurance broker  Arthur J Gallagher has padded its M&A pipeline with additional potential targets over the past weeks for a war chest it believes can stretch to the end of 2023.

Gallagher now has term sheets signed or in preparation for around 40 firms, up from a reported 35 at end-January, chief executive officer Patrick Gallagher told an investor call. The stable of targets represents some $200 million in annual revenues.

"Not all will close, but we believe we will get our fair share," Gallagher said to reiterate his long-running mantra.

The brokerage services arm at Gallagher has already patched together several deals to date in 2022. "We have agreed terms with a handful and have a really nice pipeline of opportunities," the CEO of Gallagher's US Brokerage Services, Mike Pesch (pictured), added.

The group prefers smaller tuck-in additions of local brokerages with annual revenues in a range up to $10 million, officials reminded.

Gallagher continues to believe it has the cash capacity to pay for $4 billion in acquisitions to end-2023 without reaching for new equity, chief financial officer Doug Howell reiterated.

"We still believe we can do more than $4 billion in M&A through the end of 2023 without using any stock," Howell said.

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