Mergers & Acquisitions — Down Dramatically in 2024

The investment banking firm, Optis Partners, tracks mergers and acquisitions. It released a report last week noting that M&A activity in the first six months of this year is the lowest it has been since the first half of 2020.

Optis managing partner, Timothy Cunningham said there were 300 announced insurance agency mergers and acquisitions in the first half of this year. That’s down 20% from 385 in the first half of 2023. The second quarter of 2024 saw the 8th straight quarterly drop with 146 deals. That compares to 154 in the first quarter.

Transactions are down 31% in the last 12 months. They dropped from 739 from 941.

“While some formerly very active buyers became relatively inactive, it appears that a few are picking up the pace slightly,” Cunningham said. “Others that didn’t slow down in the recent economic downturn indeed have increased their buying pace.”

Steve Germundson is one of the partners at Optis Partners. He listed who led the transaction.

• BroadStreet Partners had the most transactions with 46
• Inszone had 27
• Hub had 26

“We could be only at the beginning of a longer slide, but it seems unlikely,” Germundson said. “A plethora of buyers are still looking to invest capital, and there are still a robust number of independent agencies unable to internally perpetuate their ownership. So, we could likely be approaching a ‘normal’ level of deal-making, similar to what we saw around 2017-2019.”

The report said all but two of the top13 buyers in the first half of 2024 were private equity firms. The Leavitt Group and Arthur J. Gallagher are the two that aren’t.

Source link: Insurance Journal — https://bit.ly/3WiDLaB