Arthur J. Gallagher & Co.

Arthur J. Gallagher & Co. is an American insurance brokerage and risk management firm that acts as an intermediary between organizations seeking insurance coverage and the underwriting enterprises that provide it, generating $13.8 billion in revenue before reimbursements in fiscal 2025. Founded in 1927 as a one-person agency in Chicago, the company is now the world's third-largest insurance broker by revenue and operates in approximately 130 countries through a network of over 72,000 employees.

This is a story about two engines working in tandem. The first is organic growth — a diversified brokerage platform that has produced positive organic revenue growth every year this century, even through soft insurance markets, by layering new business wins, strong client retention, and exposure growth on top of whatever the pricing cycle delivers. The second is acquisitions — a compounding machine that has closed roughly 780 deals since 2002, most recently the $13.8 billion acquisition of AssuredPartners, the largest transaction in insurance brokerage history. Together they produce an algorithm that has delivered adjusted EBITDAC compounding at double-digit rates for more than two decades.

The file turns on a single question: whether the acquisition flywheel can continue to earn its arbitrage — buying brokers at 9-11x EBITDA while the market values AJG itself at roughly 20x — in an environment where the stock has repriced and property insurance pricing, a tailwind for years, is unmistakably softening.