Big players continue to pay “top dollar” for acquisitions in the U.S. and Canada says OPTIS Partners latest report
2019 continues to break records in the realm of insurance agency mergers and acquisitions. As outlined in the latest M&A report from the M&A advisory firm OPTIS Partners, a total of 490 mergers and acquisitions have been announced during the first nine months of 2019, already surpassing the 2018 total of 481 deals during the same time period.
For example, in the third quarter alone (Q3-2019) 158 transactions were announced, “making it the second most-active third quarter ever.” Moreover, over the past 12 month-period, there have been some 649 transactions announced nationwide.
“Agency valuations continue pushing new upper limits, and there are no signs of any slowdown in M&A activity,” said Daniel P. Menzer of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.
Acrisure continues to be the most active buyer in the country…
For those who read this report update regularly, it will come as no surprise that PE/hybrid buyers continue to dominate when it comes to agency acquisitions. According to the latest numbers, approximately 66 percent of all the total transactions through the first nine months were led by this group, 320 deals in total. Acrisure again was the most active buyer, with 71 transactions. Hub International was second in this group with 37, followed by Gallagher and Broadstreet Partners, each with 27, and AssuredPartners with 26. After this group, privately owned agencies followed, representing approximately 20 percent of all deals.
P&C Agencies continue to be the biggest seller group
With over 252 transactions announced this quarter, P&C Agencies continue to be the largest seller group. Employee benefits agencies were the second largest seller group with 123 sales, followed by P&C/Benefits Brokers with 63 deals, with the remaining 52 transactions categorized as all other deals.
“Recent economic data is somewhat mixed but generally less optimistic than in recent periods. We’ll have to wait and see what, if any impact this has on buyer appetites and valuation practices,” said Timothy J. Cunningham, managing partner with OPTIS Partners. The firm noted that while a few of the larger buyers have been acquiring stand-alone wealth management/advisory firms, these have not been included within their report.
Canada’s growing impact…
Approximately 7.6 percent or 37 out of the 490 transactions have taken place in Canada. OPTIS Partners notes that this is the highest percentage of Canadian-based sellers, second only to California (65) in the number of announced deals in 2019.
How to obtain a copy of OPTIS Partners’ latest report
Mr. Menzer notes that while not all transactions are announced, the real number of transactions will likely be higher than in the report. “But our data collection process is consistent from period to period and includes a variety of sources. We’re confident the deal activity measured over time reflects the overall M&A marketplace.”
For those interested in obtaining a copy of the OPTIS’ Partner’s latest quarterly update, a copy may be access on their website here.