M&A activity surges in the third quarter with 174 deals reported
The third quarter of 2018 has seen a renewed fervor of M&A transactions, according to the latest OPTIS Partners’ quarterly report on mergers and acquisitions across the country.
The quarterly report from OPTIS Partners includes data covering U.S. and Canadian insurance agencies that either sell property & casualty insurance, employee benefits, or both P&C and employee benefits. The report also includes transactions involving wholesalers and managing general agency brokerage businesses.
during Q3-2018, 174 deals were announced bringing the total of announced agency acquisitions from the past nine months to 463. As a result, 2018 has logged the highest Q3 or nine-month total, and the second highest year after 2017, which recorded the highest number of announced transactions with 468.
The impressive level of M&A activity seen during the quarter and throughout 2018 is a continuation of what we’ve seen over the last several years,” said Daniel P. Menzer of OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry. “Buyers, in particular, the Private Equity/Privately Funded group, continue to aggressively pursue agency owners and are driving valuation multiples to unprecedented levels across the board.”
Comparing the first three quarters of 2018
Looking at the first half of 2018 (1H-2018), Q1-2018 and Q2-2018 combined had a total of 280 transactions, in comparison to the 333 transactions reported during the first half of 2017 (1H-2017).
As is apparent from the graph below, while Q2-2018 may have signaled a slower pace, the
“surge of activity” in Q3-2018 helped 2018 to catch up to the 2017-level of M&A Activity.
Acrisure continues to be the top buyer nationally in Q3-2018
The leading buyer in Q3-2018 continues to be Acrisure with a total of seventy (70) announced transactions recorded during the past nine months. After Acrisure, the second largest buyer is Hub International with a total of 47 acquisitions this year, followed by AssuredPartners (30), and then both Gallagher and Broadstreet Partners (23 each).
The report notes that Agency valuations continue to rise with no sign of stopping, even in the face of recent interest rate increases.
Additional takeaways from the latest report
As has been the case for the past couple of years, PE/hybrid buyers continue to dominate the buyer category. This quarter this group claims more than 65 percent of the total transactions for the quarter (114 in Q3-2018 vs. 88 in Q3-2017) and nearly two-thirds of the transactions through the first nine months of the year (311 in total). While the next buyer group, privately-owned agencies, were the most active, their M&A activity was down from a high of last year (89 in 2018 vs. 111 through nine months of 2017).
The sales of P&C agencies continue to dominate the landscape of sellers with 250 announced transactions, followed by employee benefits agencies (114 sales), P&C/benefits brokers (56 deals), and all others (43 transactions).
“Since we’re only capturing information on publicized transactions and activities of the most active buyers, not all transactions are included in our totals. The actual number of agency sales is certainly much higher than what we’re showing,” said Timothy J. Cunningham, managing partner with OPTIS Partners. “In spite of this, we believe the agency M&A activity shown in this report is a meaningful barometer of the overall M&A marketplace.”
Agencies Acquired in Massachusetts through Q3-2018
As we do every quarter, the following is our listing of the agency acquisitions that Agency Checklists has tracked and written about in the first quarter of 2018, along with some contributions from OPTIS Partners regarding any agency acquisitions that we may have missed.
January 2018 (Q1)
Eastern Insurance Group Acquires The Southeastern Insurance Agency, Inc.
WTPhelan Acquires Waltham Insurance Agencies (Bateman Insurance Agency)
Kaplansky Insurance Acquires The Anthony & Malcolm Agency
ICNE Welcomes The Eastman & Davis Insurance Agency
The Segal Group acquires Touchstone Consulting OneDigital Health and Benefits Acquires Insight Performance
February 2018 (Q1)
F. Ward Insurance Agency Acquires Pine Insurance Agency Assets
Alera Group acquires Aisling Partners Insurance Brokerage
Alera Group acquires Spring Consulting Group
One Digital Group acquires The Survey Group
March 2018 (Q1)
Salem Five Insurance Acquires Gloucester’s Cape Ann Insurance
Hub International Acquires The Assets Of Massachusetts-Based Leitao Insurance Agency Inc.
Hub International Acquires the Assets of Massachusetts’ Rubino Enterprises (TYG Insurance)
April 2018 (Q2)
No transactions reported
May 2018 (Q2)
Boston-based Roblin Insurance Acquired By Prime Risk Partners
Salem Five acquires the Fabri & Rourke Insurance Agency
Risk Strategies Acquires Corporate Benefit Audits (CBA)
June 2018 (Q2)
Kaplansky Insurance Acquires Massachusetts’ Kelleher & Mackey Agency
The Hilb Group Acquires BAR Insurance Brokerage of Needham
Webber & Grinnell Purchases Holyoke’s Ross Insurance
July 2018 (Q3)
Kaplansky Acquires Its 30th Independent Insurance Agency in Massachusetts
August 2018 (Q3)
FBInsure Acquires The Castelo Insurance Agency
The Gaudreau Group Acquired By USI Insurance Services
Brown & Brown of Kentucky, Inc. Acquires Massachusetts’ Finance & Insurance Resources
September 2018 (Q3)
Worldwide Facilities Acquires Boston-based Draco Insurance Solutions
