United Valley Insurance Services and Leavitt Group Enterprises have agreed to a merger, giving the two firms a collective 150 insurance agencies and counting under one owner.
The deal was announced late Friday. Under the agreement, signed on June 26, United Valley remains a separate organization that is wholly-owned by Cedar City, Utah-based Leavitt Group Enterprises.
“This is the joining of two different types of organizations,” Dane Leavitt, CEO and Chairman of Leavitt Group Enterprises, told Insurance Journal.
Leavitt Group owns controlling interest in all of its 70 affiliates, while United Valley has 80 independent agencies it owns and serves, so “to aggregate them would be taking apples and oranges and summing them,” Leavitt said in explaining why the deal was structured the way it was.
“This does create an organization that has some significant size,” Leavitt added.
He emphasized that the United Valley agencies will continue to be maintained separately and function separately.
“It simply has a new shareholder, and the 100 percent owner of United Valley is Leavitt Group Enterprises,” Leavitt added.
The agreement is subject to applicable conditions, including shareholder approval. Both boards have approved the merger. Closure is anticipated in August. A series of meetings is set with agents for next week.
No cuts to personnel are planned due to the merger, according to Neal Stanley, United Valley’s chief operating officer.
“There will be no layoffs,” Stanley said.
Mike McCreary, president of United Valley, is expected to serve on Leavitt Groups’ board of directors. United Valley shareholders will receive an undisclosed amount of cash in the merger, which Leavitt believes they will find acceptable, calling it “a fair compensation.”
“It’s an arrangement that we anticipate the United Valley shareholders will find acceptable, and that we at Leavitt find acceptable,” Leavitt said.
Leavitt said he believes the merger will make both firms stronger in that United Valley members receive a committed and stable owner, as well as access to new services, while the Leavitt Group achieves additional scale and a broadened set of relationships with independent insurance agencies.
Stanley expects that with the Leavitt Group’s support United Valley will grow its footprint significantly over the next several years.
“We have two sides to this business. In our membership portion we would expect some significant growth in California,” Stanley said. “Right now we will concentrate on California, Arizona and Nevada, with a significant focus on Southern California and the Sacramento area of California.”
On the retail side United Valley owns United Valley Insurance Agency, for which Stanley said “we expect to receive substantial support from the Leavitt Group. They have a significant operation in assisting their producers in growing their books of business and we expect to be able to use a lot of their expertise.”
He expects the retail agency to grow its lines of business, with the primary growth occurring in commercial lines, Stanley said.
Leavitt stopped short of outlining expansion goals for both operations, saying there is “nothing to announce at present,” however he said that operations will capitalize on their “collective ability to grow.”
“We believe that the organizations are very complimentary of each other and over time the shareholders will be very supportive of expansions into other states,” Leavitt said. “We will continue to support the development a staff that will go out and educate agencies as to what United Valley offers, and educate agencies as to what the Leavitt Group offers.”
United Valley was started in 1983 in California as a local insurance agency membership organization in the central portion of the state with seven member agencies. Most of United Valley’s members are owned independent of United Valley, but place a majority of their risks through United Valley’s insurer relationships.
Founded in 1952, Leavitt Group Enterprises “builds, serves and perpetuates independent insurance agencies as a majority owner that partners with able individual co-owners,” according to the firm. The Leavitt Group insurance agencies account for more than 125 offices in 15 states.