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M&A in 2018 — Record Setting

Posted By Staff reporter, Tuesday, February 5, 2019

OPTIS Partners is a mergers and acquisitions expert. It advises companies on how to successfully sell or merge. In a release on M&A activity for 2018, OPTIS said there were 626 deals done during the year. That’s a record.

In 2017 there were 611.

OPTIS spokesman Timothy Cunningham said the 2018 total had 330 of them done in the second half of the year. In the fourth quarter alone 148 were completed. “The M&A market for insurance agents and brokers continues to surprise and exceed expectations,” he said. “There are no signs of anything changing in the near term, either.”

Most of the transactions were sellers of property and casualty insurance, employee benefits and employee benefit agencies. Private equity and hybrid purchasers numbered 424 or 68% of the total.

Cunningham noted that’s up from 383 transactions in 2017. “The concentration of PE/hybrid buyers has grown steadily since we began tracking deals in 2008, when only 21% of the transactions involved private equity buyers,” he said.

Here are the top purchasers from 2018:

  Acisure — 101

  HUB International — 58

  AssuredPartners — 37

  Gallagher — 36

  Broadstreet Partners — 34

 

 

 

There were 107 transactions involving privately owned companies. That’s down from 137 in 2017 and is the first drop since 2013.

The most sellers were from property and casualty insurance agencies.

  They number 345 transactions or 55% of the total

  Employee benefits brokers were 146 or 23% of the total

  That’s down from 174 in 2017

 

Other findings:

  2018 had 142 unique buyers

  That’s down from 177 in 2017

  The top-10 buyers accounted for 62% of the transactions

  That’s up from 56% in 2017

 

Cunningham also added:

  Those wanting to buy can find attractive properties to buy

  The value of agencies is rising to levels not seen before

  Internal perpetuation is becoming a growing challenge because of rising values and the prices third-party buyers are willing to pay

“The actual number of agency acquisitions was far greater than the number reported, as many buyers and sellers do not report transactions, and some acquirers do not report small transaction,” he said.

As for the future? OPTIS Partners offered this advice:

  If you’re purchasing, watch out for cash flow and don’t overpay

  If you’re selling, find the best cultural and operational fit

  Sellers need to take care of strong pricing before it drops

 

Source links: Insurance Business America, PropertyCasualty360.com

Tags:  Insurance Content  OPTIS Partners is a mergers and acquisitions  Timothy Cunningham 

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