A record of 665 transactions have been reported during the past 12-month period
The first half of 2019 has shattered another record with respect to the number of agency acquisitions which closed during the first six months of the year.
“The aggressiveness of buyers continues to push pricing and transaction counts to new highs,” said Timothy J. Cunningham, managing partner of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry. Each quarter, the 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.
According to their latest M&A Analysis, there were a total of 328 insurance agency sales occurred in the first half of the year (“1H-2019”), 28 more transactions as compared to the data from 1H-2018. This number is the second-highest six-month total noted Optis Partners in its report. 2019 trails only behind 2017, when, trailing only the first half of 2017 when 333 transactions were reported.
The graph below takes a look at the total amount of mergers & acquisitions activity over the past eight years, along with a comparison of agency acquisitions by the first half of the year for the past three years.
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:
- The pace and aggressiveness of the buyer continue to push pricing and transaction counts to new limits.
- The rate of acquisitions for what is considered the “Top 100” group nationally, has been quiet during Q2-2019, with only one transaction from this group closing during the quarter.
- Q2-2019 saw the highest number of PE/Hybrid buyers since 2008, with a total of 28 agency acquisitions stemming from these type of buyers in 1H-2019. The highest number of PE/Hybrid acquisitions continues to be during 1H-2008 when there where 3o of these buyers completed one or more acquisitions during this time period.
Acrisure led again with the most buyer transactions in the 1H-2019
While Acrisure continued to lead all buyers with an impressive 39 transactions during 1H-2019, OPTIS Partners noted that it was the company’s lowers six-month total since 2016. As for other active buyers this year, Hub Internationsal has announced 26 deals so far this year, followed by Patriot Growth (21), Assured Partners (21, Broadstreet Partners (18) , and Gallagher (16).
The following is a look at those buyers with more than 20 deals in in the past 12-month period:
On the flip-side, the majority of sellers during 1H-2019 were P&C-only agencies with 169 transactions. Employee Benefits agencies were the second-largest group of sellers being involved in a total of 82 transactions during this time period. P&C/Benefits Brokers as sellers were involved in 46 deals, followed by all sellers who participated in 31 transactions.
How does Massachusetts mergers and acquisitions fare in comparison?
Massachusetts makes a minuscule portion of the total number of mergers & acquisition activity nationally with only 16 reported transactions during the 1H-2019. Moreover, while the majority of sales have been P&C insurance agencies, the vast majority of transactions have occurred between locally-owned operations or funded entities. To see our exclusive listing of the agencies bought and sold during the first half of 2019, please refer to Agency Checklists’ article “Insurance Agency Mergers & Acquisitions In Massachusetts As Of Q2-2019.”
How to access the full report
It is interesting to note, that Canadian activity was highlighted in this report, due to the fact that 27 out of the 328 deals reported took place in our neighbor to the North, representing over 8% of the total number of transactions. This was the highest number of deals and the percentage of Canadian-based sellers ever during the first six months of the year. For those interested in reading about Canadian activity or to access the official report, please contact us here.
Our checklists may help. For example, you could start with our checklist on Purchasing A Massachusetts Insurance Agency. Another good place to start is Agency Checklists’ Why, When, & How An Agent Should Use A Business Broker, which is sponsored by Insurance Agency Consulting Services, LLC. Or maybe, Selling Your Massachusetts Insurance Agency, sponsored by Donovan, Sullivan & Ryan is what you need to read first. If you would like to see a list of all Agency Checklists’ current checklists, start here.
Or, if you are farther along in the process or need further insights or information, you can contact us here.