Q1 2019 Surpassed Q1 2018 by one deal
As it does each quarter, Chicago-based OPTIS Partners tracks the rate of mergers and activities across the U.S. and Canada, as well as what type of buyers and sellers are doing the purchasing. With no signs of slowing down, insurance agency mergers and acquisition continue at a sustained pace during the first quarter of 2019 (1Q-2019).
According to OPTIS Partner’s M&A Analysis for the first quarterly summary for 2019, there were a total of 151 insurance agency sales in the first three months of the year, exactly one more than the 150 deals announced at the start of 2018. This marks a strong start for 2019, and indicates that the market is showing no signs of slowing down, even after 2018 which marked the highest amount of M&A insurance agency activity on record.
The graph below takes a look at the amount of mergers & acquisitions activity over the past eight years.
OPTIS Partners Insights on the start of 2019…
In commenting on the continued pace of M&A activity in both the U.S. and Canada, Timothy J. Cunningham, managing director of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry, and Daniel P. Menzer, CPA, a partner with the firm, offered the following insights:
- There are no signs of any changes in buyer or seller behavior, both in terms of appetite for transactions and valuations of agencies for sale.
- Individual quarterly totals can fluctuate dramatically from one period to the next and are not necessarily indicative of the overall M&A activity level
- There were only 57 unique buyers in 2019, the lowest number in any first quarter since 2014.
- Acquisitions in Canada have increased from 1-2% of the total 10 years ago to 6-8% now.
While transactions are high, the number of buyers are low
One of the most interesting aspects of Q1-2019 is the fact that while the number of transactions continues to be high, the actual number of unique individual buyers was quite low. In fact, OPTIS Partners states in its report that with only 57 different individual buyers in Q1-2019, this was the lowest number of buyers noted since 2014. Another interesting fact from this year’s report is this quarters’ most active seller is also a new entrant.
Patriot Growth Insurance Services had the highest number of buyer transactions in Q1-2019 with 18 transactions logged during the quarter. OPTIS Partners says of that number, 17 deals were closed as part of the kick-off of the company’s new venture. Following closely behind Patriot, was Acrisure, which continued to grow its national presence with another 16 deals closed in Q1-2019. Hub followed Acrisure with 12 deals this quarter, along with Gallagher and Broadstreet Partners with both firms announcing ten deals each.
Overall, OPTIS Partners says that Private Equity-backed and Hybrid Deals accounted for 67% of all deals this quarter.
How to access the full report
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