Marsh & McLennan's Unit to Buy Summit and Pavilion

Mercer, a unit of Marsh & McLennan Companies, Inc. MMC, will acquire Summit Strategies Group, a leading investment consultant headquartered in St. Louis, MO.

Summit is an attractive fit for the company’s consulting business, given its proficiency in providing high value???added investment consulting services to institutional clients. Its services range from traditional consulting (for defined benefit pension plans, health care systems, endowments and foundations), defined contribution services and outsourced chief investment officer support.

Mercer’s global research network and client experience will greatly benefit from Summit’s innovative and customized solutions and its unwavering commitment to a service culture.

On the same day, Mercer also announced that it will buy the investment consulting, alternatives consulting and wealth management operations of Pavilion Financial Corporation.

Pavilion, by virtue of its niche market presence in consulting along with its experienced leadership talent supporting strong consulting and research capabilities, particularly for alternative investments, is the best complement for Mercer’s consulting business.

Pavilion will aid Mercer’s retirement and investment consulting business. In the United States, Pavilion is an industry leading specialist in the defined contribution, endowment and foundation, healthcare and insurance sectors. In Canada, it has a strong presence in private wealth management.

Both deals will close by the end of 2018.

The company’s unit Mercer is heavily investing in growth. In the second quarter, Mercer announced the expansion of its investment capability by acquiring a license in India for third party investment advisory services. Mercer also continues to add to its geographic region capabilities through strategic mergers and acquisitions. In the second quarter, it completed two acquisitions in the career line of business, which adds roughly $16 million of annualized revenues. For the first six months of 2018, revenues at Mercer was $2.3 billion with 3% underlying revenue growth.

These deals will further complement the segment’s revenue growth.

In a year's time the stock has gained 6%, slightly ahead of the industry's gain of 5.2%.

Companies in this space have been actively making acquisitions as a strong economy and a positive business sentiment provides them ample scope for growth. For instance, Brown and Brown, Inc. BRO announced the acquisition of Health Special Risk and Professional Disability Associates in July.

Arthur J. Gallagher & Co. AJG announced in May that it will acquire 100% of the equity interests of Pronto Holdco LLC, the parent company of Pronto Insurance (Pronto).

At the start of the year, Aon plc AON acquired The Townsend Group, a leading provider of global investment management and advisory services primarily focused on real estate and real assets.

Marsh & McLennan Companies carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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