Insurance broker World Insurance Associates has purchased the personal and commercial insurance agency Exchange Underwriters, Inc. from CB Financial Services, Inc., the holding company for Pennsylvania-based Community Bank.
According to the asset purchase agreement, World Insurance Associates will pay $30.5 million in cash plus possible additional revenue-based earn-out payments. The purchase price represents approximately 5.11x last 12 months’ insurance agency revenue and approximately 26.08x September 30, 2023 last 22 months’ insurance agency earnings.
The deal closed on December 1, the parties said.
Current leadership and direct employees of Exchange Underwriters are expected to join World. Richard Boyer is president of Exchange. The agency has its office in Washington, Pennsylvania.
Community Bank purchased Exchange Underwriters in 2014. In 2018 it relocated to Washington and merged with Beynon Insurance Agency to become one of the largest insurance agencies in the Pittsburgh region.
Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, its wholly owned subsidiary.
The net gain for CB Financial on the sale, on an after-tax basis, is expected to be approximately $16.4 million, according to the announcement.
John Montgomery, president and CEO of CB, said the additional capital provides flexibility for the bank to “evaluate and pursue various strategic initiatives to redeploy capital in support of our core banking business with a focus on continuing to enhance long-term shareholder value.”
The transaction is subject to customary closing conditions and is anticipated to be completed in the fourth quarter of 2023.
World Insurance Associates is headquartered in Iselin, N.J. Since its founding in 2011, World has completed more than 200 acquisitions and serves its customers from more than 250 offices. World is ranked #24 on the Top 100 P&C Agencies by Insurance Journal, and ranked #20 on the Top 50 Personal Lines Agencies by Insurance Journal.
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