Morgan Stanley Sees Another Accretive International Acquisition for Arthur J. Gallagher & Co.

In a report published Tuesday, Morgan Stanley analyst Kai Pan reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “AJG is acquiring 87.1% of Noraxis in Canada for $388m. Noraxis is a top-five Canadian insurance broker currently owned by RSA. The total valuation of $445m represents 3.5x 2015e revenue ($127m) and 9.3x 2015e EBITDAC ($48m), in-line with recent Bollinger / Giles / Oval / Wesfarmers acquisitions (~8-10x EBITDAC). The deal adds ~3% to revenues and is accretive to EBITDAC margin (~38% at Noraxis vs. ~23% 2014e at AJG). AJG management expects ~7-10c accretion to 2015 EPS (~3% of our current 2015e). Following the recent ~$900m equity raise, AJG plans to finance this acquisition mostly through debt.” Arthur J. Gallagher & Co. closed on Monday at $45.30.