Marsh McLennan sees ‘pretty solid’ mid-market M&A pipeline in 2022

Global broker  Marsh McLennan continues to pick through M&A opportunities, chiefly in the mid-market brokerage space, but with increasing awareness that with rising valuations must come greater caution, officials told the Q1 earnings call.

“M&A is a big part of our organisation,” CEO Dan Glaser told the Q1 earnings call.

M&A takes top position on the excess capital waterfall. “The one thing we are committed to is capital deployment,” Glaser said. “We favor acquisition over share repurchase, but we certainly favor repurchase over accumulating more cash on the balance sheet.”

Marsh vows it won’t overbid to meet targets. “Multiples have risen, therefore we are even more selective than we used to be,” Glaser said.  Marsh McLennan is sufficiently doubtful of teasers on the market to prefer leaning towards firms it has known long-term.

Marsh McLennan has previously spoken of a hope to deploy $4 billion of capital in 2022 for varied forms of growth and shareholder remuneration. Today, as before, there is “no budget” for how much of that need goes to M&A.

“The M&A pipeline ebbs and flows,” Glaser said. “It looks pretty good right now.”

Chief operating officer John Doyle (pictured) called the pipeline “pretty solid,” but indicated that “the pipeline is deepest in the mid-market brokerage space” where “some of the most attractive opportunities” can be found.

That said,  Marsh McLennan took it the other way in Q1 and likely again in Q2, putting the bulk of its buys into the management consulting wing of Oliver Wyman.  Marsh McLennan last announced Oliver Wyman will buy Booz Allen Hamilton‘s management consulting and cybersecurity business in the middle east.

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