Cash generative Gallagher has options to top up M&A war chest for 2019

Strongly-performing US broker Gallagher has the firepower for even more acquisitions this year.

Gallagher had free cashflow of $641m in 2018, according to full-year accounts, just under half of which was paid in dividends to shareholders.

According to Morgan Stanley, Gallagher is issuing $600m of new debt, leading to a capacity of around $1.6bn for potential mergers and acquisitions.

However, Gallagher management are potentially looking at around $460m spend, which is between 30% and 40% higher than last year, the bank’s analyst said. Last year, Gallagher made 48 deals.

It kicked off 2019 with the the acquistion of UK broker Stackhouse Poland

Gallagher rising M&A war chest comes after another quarter and full-year of strong results.