Deal Activity Still Booming

By | January 25, 2016

Deal count for the third quarter of 2015 continued its record breaking pace with 89 announced transactions. Although it was the slowest quarter in 2015 (107 in 1st quarter and 99 in 2nd quarter), it was the most active third quarter in the past 10 years. The total deal count for year-to-date 2015 (as of Sept. 30, 2015) was at 295 U.S. based transactions, which is a 28.3 percent increase over the number of announced transactions over the same time period in 2014. This is the highest deal count through the third quarter of the year in the past 10 years. For the third quarter of 2015, 34 deals closed in July, 33 in August and 22 in September.

For the first nine months of 2015, 56 percent of all acquired agencies were property/casualty (P/C) firms, 29 percent were multi-line agencies, and 15 percent were employee benefits firms. Specialty distributors made up 23 percent of the total deals year-to-date. This is an increase from 20 percent in 2014.

Private-equity backed and independent agencies completed 206 transactions, accounting for 69.8 percent of total deal activity in the first nine months of 2015. Deal count for public brokers, which accounted for 9.2 percent of the deal activity through nine months of 2015, declined from 39 closed transactions year-to-date 2014 to 27 year-to-date 2015. Insurance companies, banks and other buyers experienced a surge in deal activity from 32 closed transactions in 2014 to 62 in 2015, and accounted for the remaining 21 percent of total deals.

The top five buyers for the year represented 29 percent of total deal activity through quarter three of 2015 and the top 10 accounted for 46.7 percent. AssuredPartners Inc. led the pack with 25 announced transactions and continued its aggressive growth strategy by focusing on P/C and multi-line retail firms. AssuredPartners Inc. closed 15 transactions in the East, four in the Midwest and continued its expansion out West with six closed deals.

Hub International Limited (Hub) was second on the list with 24 acquisitions. Hub picked up the pace from the first two quarters closing 14 deals in the third quarter. Hub closed 12 acquisitions on the West coast, three in the Midwest and nine in the East.

Confie Seguros Insurance Services and Arthur J. Gallagher & Co. (Gallagher) were third and fourth with 13 and 12 announced transactions, respectively. This marked an increase in deal activity for Confie Seguros, mainly a non-standard auto specialist that completed 13 acquisitions during all of calendar year 2014. In addition to acquiring 10 P/C agencies, Confie Seguros acquired three program administrators, which include managing general agents and managing general underwriters. Arthur J. Gallagher & Co. completed 12 transactions that were evenly spread between retail, wholesale, P/C, multi-line and employee benefits firms.

Acrisure LLC was fifth completing 11 acquisitions with targets being split between P/C and multi-line agencies.

The top 10 buyers, as measured by deal count, were rounded out by NFP Corp. (10), Brown & Brown Insurance (eight), The Hilb Group (eight), Alliant Insurance Services Inc. (six) and Integro Insurance Brokers (six). Top 10 buyers that announced international acquisitions included: Hub, Gallagher, NFP and Integro.

Acquisition activity is on pace to break the record setting year in 2014, largely driven by the continued demands of private equity. Private equity backed brokers increased deal activity by 45 percent from the first nine months of 2014 to the first nine months of 2015. While public broker activity has simmered in comparison, independent brokers, banks and insurance companies have more than picked up the slack in their search for growth and talent.

Securities offered through MarshBerry Capital, Inc., Member FINRA and SIPC, and an affiliate of Marsh, Berry & Co. Inc. 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122 (440-354-3230). Except where indicated, the information provided is based on matters as they exist as of the date of preparation.

AnnouncedDeals_chart

Merger and Acquisition Activity

Announced Date Buyer Seller
7/1/15 Eastern Bank Corp. Francis R. Doran Insurance Agency Inc.
7/1/15 Marsh & McLennan Cos. Inc. J.W. Terrill Inc.
7/1/15 Propel Insurance Inc. Ross & Associates Insurance Services Inc.
7/1/15 World Insurance Associates LLC Bux-Mont Agency Limited
7/1/15 Chadler Group Inc. Robert Morrill Agency Inc.
7/2/15 Hub International Limited HDH Group Inc.
7/2/15 Alliant Insurance Services Preferred Concepts Holdings LLC
7/3/15 AssuredPartners Inc. Peliton Holdings LLC
7/6/15 Hub International Limited Cooper, Simms, Nelson & Mosley Inc.
7/6/15 Lovell Minnick Holdings LLC Worldwide Facilities LLC
7/7/15 Hub International Limited Murphy Group Holdings
7/7/15 Integro Ltd. Lemme Insurance Group Inc.
7/10/15 Acrisure LLC Keevily Spero Whitelaw Inc.
7/13/15 Hub International Limited Group Benefit Specialists Inc.
7/13/15 Regions Financial Corp. Ronald F. Holehouse Agency Inc.
7/13/15 West Michigan Insurance Inc. Dominion Risk Management
7/14/15 Risk Strategies Company LLC Emmett W. MacCorkle Inc.
7/14/15 USI Holdings Corp. Alexander & Associates Insurance Services LLC
7/15/15 Brown & Brown Inc. Certain assets of RF Ougheltree & Associates LLC
7/15/15 Vanner Insurance Agency Edmund D. Stevens Inc.
7/15/15 National General Holdings Corp. Lender-Placed Insurance Business
7/16/15 Benefits Network Inc. VCS Group Inc.
7/20/15 Apax Partners Assured Partners Inc.
7/22/15 AAdvantage Insurance Group LLC Premier Insurance Associates Inc.
7/22/15 AssuredPartners Inc. Founders Insurance Group Inc.
7/22/15 Alliant Insurance Services Todd Garibaldi Insurance Agency Inc.
7/22/15 Teague Insurance Agency Inc. C. Lee Williams and Associates Inc.
7/24/15 Peoples Bancorp Inc. Hedges Gallery of Insurance Agency Inc.
7/30/15 AssuredPartners Inc. Waltz Sheridan Crawford Insurance Agency
7/30/15 Smith Brothers Insurance Inc. Carillo & Howland Inc.
7/31/15 AmTrust Financial Services Inc. Climate Crop Insurance Agency LLC
7/31/15 NFP Corp. BWD Group LLC
7/31/15 All Risks Ltd. Tower Program Insurance Services Inc.
7/31/15 Risk Innovations LLC Columbia Commercial General Agency Inc.
8/1/15 Buckner Company Inc. Keller-Lowry Insurance Inc.
8/1/15 Hilb Group LLC JWB Insurance Group
8/1/15 Union Insurance Group Inc. McLaughlin Co.
8/3/15 AmWINS Group III Group Inc.
8/3/15 Beneficial Mutual Bancorp Inc. (MHC) Pye Karr Ambler & Co. Inc.
8/3/15 Confie Seguros Insurance Services Insurance King Auto Agency LLC
8/3/15 Confie Seguros Insurance Services Reynolds & Reynolds Agency Inc.
8/3/15 Confie Seguros Insurance Services Schunke Insurance Agency Inc.
8/3/15 Marsh & McLennan Companies Inc. Cline Wood Agency Inc.
8/3/15 Regions Financial Corp. A.I. Group Inc.
8/4/15 Hub International Limited BW Insurance Agency Inc.
8/5/15 Odyssey Investment Partners LLC Integro Ltd.
8/5/15 Hub International Limited Pippel Insurance Agency Inc.
8/6/15 Hub International Limited Colorado Nonprofit Insurance Agency Inc.
8/7/15 Hub International Limited Dunagan Associates Inc.
8/7/15 Marsh & McLennan Cos. Inc. Tequesta Insurance Advisors
8/7/15 Acrisure LLC AGS Talcott Inc.
8/7/15 Acrisure LLC Connor Group Insurance Agency
8/10/15 Higginbotham & Associates Inc. Commercial Global Insurance Services
8/10/15 Hub International Limited Triangle Insurance Services Inc.
8/12/15 Reinsurance Group of America, Inc. Elite Sales Processing Inc.
8/13/15 Brown & Brown Inc. Kreeft & LeGrow LLC
8/17/15 Hub International Limited Doctors Insurance Services of New England Inc.
8/17/15 Patriot National Insurance Group Inc. R.C.A. Insurance Group
8/19/15 Meadowbrook Insurance Group Inc. Mackinaw Administrators LLC
8/20/15 USG Insurance Services Inc. US Assure
8/24/15 Novus Acquisition & Development Corp. WCIG Insurance Services Inc.
8/24/15 Distinguished Programs Holdings LLC Fulcrum Insurance Programs
8/27/15 AssuredPartners Inc. Insurance & Benefits Group LLC
8/27/15 Integro Ltd. HealthCare Risk Specialists LLC
8/28/15 The Andrew Agency Crowder & Holloway Inc.
8/28/15 U.S. Risk Insurance Group Inc. Strategic Program Managers LLC
8/31/15 Arthur J. Gallagher & Co. National Administration Co.
9/1/15 Acrisure LLC Undisclosed Independent Agency
9/1/15 Acrisure LLC Undisclosed Independent Agency
9/1/15 Armed Forces Benefit Association Shuey Agency Inc.
9/1/15 J. Smith Lanier & Co. Flowers Agency LLC
9/1/15 NFP Corp. Insurance Management Associates
9/1/15 Ryan Specialty Group LLC Vista Insurance Partners of Illinois Inc.
9/1/15 First Defiance Financial Corp. Buckeye Insurance Consultants Inc.
9/2/15 Hub International Limited Arrow Insurance Service Inc.
9/2/15 The Segal Group Fiduciary liability policies / fidelity bonds of David Walker Insurance Services
9/2/15 MedPro Group PLICO Inc.
9/3/15 AssuredPartners Inc. Thomas J. Sisk & Co.
9/3/15 Hub International Limited EmSpring Corp.
9/4/15 Hub International Limited Brown Agency Inc.
9/8/15 AssuredPartners Inc. Bandy Van Cleave & Williamson LLC
9/8/15 Hub International Limited Howitt Benefit Services Inc
9/9/15 AssuredPartners Inc. Western Rivers Corp.
9/18/15 Arthur J. Gallagher & Co. North Alabama Insurance Inc.
9/22/15 South Carolina Federal Credit Union Chastain Insurance Agency Inc.
9/23/15 AssuredPartners Inc. Moscker Insurance Agency Inc.
9/24/15 USI Holdings Corp. Benefit Controls of the Carolinas Inc.
9/28/15 AmTrust Financial Services Inc. Republic Cos. Inc.
9/29/15 XL Group plc New Energy Risk Inc.

Sources: SNL Financial, Insurance Journal, other publicly available sources and MarshBerry proprietary databases
Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only. MarshBerry estimates that only 15 percent to 30 percent of all transactions are actually made public. Past performance is not necessarily indicative of future results.

About Christopher Darst

Darst is senior vice president at Marsh, Berry & Co. Inc. More from Christopher Darst

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