Merger and Acquisition Activity Sets New High-Water Mark

By | February 22, 2016

Merger and acquisition activity for 2015 set a new record with 456 deals, sailing past the previous high-water mark of 325 deals set in 2012, according to recent data. The fourth quarter closed with 104 announced transactions, pushing the total deal volume up an impressive 42 percent over the prior year, as market conditions led to increased buyer demand and opportunities for sellers.

The availability of capital along with an expanding buyer pool helped to create a surge of activity among insurance brokerages backed by private equity. Private equity-backed brokers drove activity with 212 deals or 46 percent of the total deal count for 2015. Independent agencies accounted for 119 deals or 26 percent of the total activity. Public brokers completed 39 deals (9 percent of the total) and banks, insurance companies, and other buyers completed the remaining 19 percent of acquisition activity.

Activity in 2015 shifted more heavily toward the property/casualty firm, with those firms accounting for 57 percent of all sellers during the year. Multi-line agencies, those with both property/casualty and employee benefits, comprised 28 percent of all deals. Employee benefits-only firms dropped to 15 percent of total activity.

Retail agencies comprised 82 percent of all deals with the specialty distribution segment taking the remaining 18 percent. Within the specialty distribution segment, activity was split among program administrators (72 deals) and wholesale brokers (11 deals). While retail agencies make up the majority of the transaction activity, the volume of specialty distributors increased 32 percent (20 more deals) from the prior year.

There were 44 buyers in 2015 with multiple acquisitions, but it was the five most active that really drove activity to new heights, with 33 percent of all announced transactions. The top five, all private equity-backed, each had their most active years to date. Topping the leader board was Acrisure LLC with 39 U.S. based deals, the highest transaction count seen on record for any buyer. AssuredPartners Inc. and Hub International Ltd. followed with 34 and 30 U.S. based deals, respectively. BroadStreet Partners Inc. became an active player in 2015 with 26 announced transactions, a marked increase from two deals the prior year. Rounding out the top five most active with 20 deals was Confie Seguros Insurance Services, continuing to build its presence with regional personal lines brokerages. With a combined 149 deals, these five buyers announced 72 more deals in 2015 than the prior year.

Expanding the leader board brings in two public brokers, Arthur J. Gallagher & Co. (18) and Brown & Brown Inc. (12). Also completing the year in the double digits was NFP Corp. with 16 announced transactions, more than twice its prior year count.

While demand swelled for the historically active buyers, there were many new entrants that stepped in from the sidelines. In 2015, there were 188 buyers in the market, 100 of them first-time acquirers. Compared to the total 136 buyers the prior year, there were 38 percent more buyers making acquisitions.

In our opinion, activity in 2015 was propelled to new heights by the low cost of capital, all-time high valuations and buyer demand that seemed difficult to satiate. While market dynamics can change at any time and acquisition activity could significantly relax, based on what we are seeing, the end of the buying spree is not currently visible on the horizon.

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. Phone: 440-354-3230. Except where otherwise indicated, the information provided is based on matters as they exist as of the date of preparation. Past performance is not necessarily indicative of future results.

announced-deals

Merger and Acquisition Activity

September to December 2015

Announced Date Buyer Seller
10/01/15 Acrisure LLC Undisclosed Independent Agency
10/31/15 Acrisure LLC Winant-Bomack Insurance Agency LLC
11/01/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/01/15 Acrisure LLC Undisclosed Independent Agency
12/05/15 Acrisure LLC Undisclosed Independent Agency
12/17/15 Acrisure LLC Anthony & Co. Inc.
12/21/15 Acrisure LLC H.D. Segur Inc.
12/31/15 Acrisure LLC Undisclosed Independent Agency
11/01/15 All Risks Ltd. Specialty Risk Underwriters Inc.
10/13/15 Alliant Insurance Services Certain books of business
10/23/15 Arthur J. Gallagher & Co. Sigma II Insurance Agency Inc.
12/01/15 Arthur J. Gallagher & Co. McPherson Benefits Group LLC
12/11/15 Arthur J. Gallagher & Co. Centennial Insurance Agency LLC
12/18/15 Arthur J. Gallagher & Co. Brown Hobbs & McMurray Insurance
12/18/15 Arthur J. Gallagher & Co. Managed Healthcare Solutions Inc.
12/21/15 Arthur J. Gallagher & Co. Hawk Agency Inc.
12/07/15 Associates of Glens Falls Inc. Loomis & LaPann Inc.
10/05/15 AssuredPartners Inc. Wilson H. Flock Insurance Inc.
10/16/15 AssuredPartners Inc. D.M. Lovitt Insurance Agency
10/21/15 AssuredPartners Inc. Alliance Insurance Group
12/01/15 AssuredPartners Inc. Insurance Marketing Center Inc.
12/21/15 AssuredPartners Inc. Redmond General Insurance Agency
12/30/15 AssuredPartners Inc. Glenn/Davis & Associates Inc.
12/30/15 AssuredPartners Inc. Church Insurance and Financial Services Inc.
10/02/15 BB&T Corp. Connecticut Underwriters Inc.
10/01/15 BenefitMall Forest Financial Group Inc.
10/01/15 Beneflex Insurance Services Inc. Insurance Dimensions Inc.
10/22/15 Bremer Financial Corp. Nonprofit Insurance Advisors
10/01/15 BroadStreet Partners Inc. Debra LaVelle Inc.
10/01/15 BroadStreet Partners Inc. Commercial Insurance Group Inc.
10/29/15 BroadStreet Partners Inc. Bayberry Insurance
11/30/15 BroadStreet Partners Inc. Bramlett Agency Inc.
12/01/15 BroadStreet Partners Inc. Linda R. Goble
12/31/15 BroadStreet Partners Inc. Liberty Truck Insurance Inc.
11/17/15 Brown & Brown Inc. Certain assets of BenTrust
11/30/15 Brown & Brown Inc. MBA Insurance Agency
12/09/15 Brown & Brown Inc. Smith Insurance Inc.
12/17/15 Brown & Brown Inc. Ocean Marine Insurance Agency Inc.
10/01/15 CBIZ Inc. Pension Resource Group Inc.
10/08/15 Charles W. Merriam & Son Inc. Scherff Insurance Agency Inc.
12/16/15 Chestnut Hill Insurance Group LLC Rotatori Insurance Inc.
10/02/15 Confie Seguros Insurance Services All Florida Insurance Group Inc.
10/02/15 Confie Seguros Insurance Services Dunlap & Bajak Inc.
10/02/15 Confie Seguros Insurance Services Schmitt & Kraft Inc.
10/02/15 Confie Seguros Insurance Services TS Insurance Group LLC
10/31/15 Confie Seguros Insurance Services AFA Claims Services
10/31/15 Confie Seguros Insurance Services Realty Support Services Inc.
11/16/15 Confie Seguros Insurance Services California Insurance Specialists
12/21/15 Cross Insurance Knapp, Schenck & Co. Insurance Agency Inc.
11/15/15 CWI Underwriters LLC Weston Financial Group Inc.
10/01/15 Driskell Peterson Insurance Agency LLC Eby Insurance Agency
12/31/15 DSP Insurance Services Certain assets of Willis of Illinois’ Schaumburg office
11/01/15 Eastern Bank Corp. Northwestern Benefit Associates Insurance Agency Inc.
10/07/15 Fairfax Financial Holdings Limited Travel Insured International Inc.
10/30/15 Fairfax Financial Holdings Limited Brownyard Programs Ltd.
12/16/15 First Bancorp Bankingport Inc.
12/01/15 First Mid-Illinois Bancshares Inc. Illiana Insurance Agency LTD
10/27/15 GDP Advisors LLC Insurance Connection of Texas
10/01/15 Hilb Group LLC Gentry Insurance Agency Inc.
10/02/15 Hub International Limited IAS Associates LLC
10/05/15 Hub International Limited Johnson & Wood Insurance Services Inc.
10/12/15 Hub International Limited Oxford Coverage Inc.
11/04/15 Hub International Limited RFO Enterprises Inc.
11/05/15 Hub International Limited Employee Benefits Group Inc.
12/02/15 Hub International Limited Forest Financial Group Inc.
12/01/15 J. Smith Lanier & Co. Rogers, Parker & Associates Inc.
10/20/15 Kelso & Co. Risk Strategies
12/01/15 LIA Great Bend Inc. Albright Insurance Agency Inc.
10/28/15 Maritime Insurance LLC Port City Holdings LLC
11/04/15 Marsh & McLennan Cos. Inc. Dawson Insurance Agency Inc.
12/01/15 NFP Corp. Pieper-Ramsdell Agency Inc.
12/04/15 NFP Corp. Absolute Advantage Insurance Services LLC
12/11/15 NFP Corp. Vanorsdale Insurance Services Inc.
11/18/15 Orchid Underwriters Agency LLC Platinum Partners
12/16/15 Oswego Valley Insurance Agencies LLC Banach Insurance Agency
10/13/15 Parsons Insurance Services LLC Alpha Insurance Agency Inc.
11/01/15 Paul Hanson Partners Specialty Insurance Solutions Universal Insurance Facilities Ltd.
10/15/15 People’s United Financial Inc. Kesten-Brown Insurance LLC
10/22/15 Pfenninger, Claxton, & Estelle Insurance Group Ameriana Insurance Agency Inc.
12/14/15 Provident Insurance Group LLC Eaton & Associates
11/10/15 Risk Strategies Co. LLC M. G. Welbel & Associates Inc.
12/07/15 Risk Strategies Co. LLC Re-Solutions Intermediaries LLC
11/15/15 SEK Holding Co. LLC All In One Insurance Services Inc.
12/14/15 Senior Market Sales Inc. Futurity First Insurance Group Inc.
12/31/15 Tarpey Insurance Group Inc. Wilson Insurance Agency Inc.
10/09/15 TowneBank B.H. Baird Insurance Agency
10/09/15 TowneBank Invincia Insurance Solutions
10/09/15 TowneBank Total Insurance Planning LLC
12/01/15 U.S. Risk Insurance Group Inc. Matias Underwriters LLC
10/13/15 USI Holdings Corp. Gardner & Associates Enterprises Inc.
12/09/15 Wallace, Welch & Willingham Inc. Sondregger Insurance Agency Inc.
10/01/15 Westaim Corp. Capital Risk Underwriters Inc.
12/01/15 World Insurance Associates LLC Redmond Insurance Associates 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 Meredith Reeves

Reeves is a senior consultant for MarshBerry. Email: Meredith.Reeves@MarshBerry.com. More from Meredith Reeves

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