An average of one agency acquisition a year for the last 15 years
Earlier this month, Ely Kaplansky, President and Founder of Kaplansky Insurance, announced that his agency had acquired the Lex Insurance Agency. This latest acquisition for the Brookline-based agency marks its sixteeenth agency acquisition in the past 15 years, and the twelfth in the past 10 years.
Agency Checklists asked Mr. Kaplansky what has been the secret of his success in acquiring so many good agencies. “When I am asked how it is that we acquire so many agencies, my answer is simple; We pay more money than the next guy and we usually pay all cash. No retention or seller financing.”
In Kaplansky’s opinion, however, the greatest challenge in acquiring an agency is finding that right one. “My greatest challenge is locating good agencies for sale. We use various methods that include networking with our companies and other agents.” Generally, “We look for well-established agencies in good communities that have good books of business and a professional staff. The most important thing is a good book of business at a minimum, with the potential to be improved.”
In this case, Kaplansky is very happy with The Lex Insurance Agency. Founded in 1986 by Dennis Lex, Lex Insurance is a well-established agency located in Concord with a very professional staff. The agency had grown to over $4,000,000 in premium by the time of its sale.
Relationships with merger and acquisitions consultants led to most recent acquisition
Kaplansky says that finding that right agency can come from a myriad of sources that use various methods that include networking with Kaplansky’s companies and other agents. “We have centers of influence such as accountants and attorneys that will also refer prospects to us,” says Kaplansky. Additionally, “we occasionally advertise and send out mailings. We also have relationships with several Merger and Acquisition Consultants.”
In the case of Lex Insurance acquisition, it was Kaplansky’s relationships with one of these M&A consultants that brought about the opportunity to buy it. “This acquisition was a result of one of my M&A consultants establishing a relationship with the seller and nurturing that relationship for over 3 years until the seller was ready to perpetuate his business.”
Treating the Lex Insurance acquisition as more a merger than acquisition
Staying true to form, Kaplansky says the acquisition of the Lex Insurance staff and book of business will be treated more as a merger than an acquisition of the company. “The perception that we create for the our new clients is that it should feel more like a merger than an acquisition. We make every effort to retain existing staff and management which helps us to maintain a high rate of client retention.”
While Lex Insurance may be the sixteenth acquisition for Kaplansky Insurance, it will likely not be the last. Kaplansky continues to be interested in acquiring and growing his company.
“We are now looking to target larger acquisitions although we are still a buyer for well run smaller agencies if they are located in our marketing territory, which is primarily most of eastern Massachusetts,” Kaplansky explains, but “we will consider larger acquisitions anywhere in Massachusetts, Southern New Hampshire and Rhode Island. Our goal is to double in size within the next three years.”
_______________________________________________________
Other Articles from Agency Checklists that you might be interested in…..
A Checklist before Selling Your Agency
An Acquisition Agreement Checklist
