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February 7, 2014
A flurry of M&A announcements were made over the past few weeks providing a busy start to 2014. Some notable acquisitions include:
January 3, 2014
USI Insurance Services picked up a former top 100 insurance broker in Van Gilder Insurance Corporation expanding its presence in the Rocky Mountain area. Van Gilder, based out of Denver, Colorado, had approximately $20 million in revenue according to the latest figures provided in Business Insurance's 100 largest brokers list (dated July 16, 2012). In addition, USI purchased Molton, Allen & Williams, a multi-lines insurance agency headquartered in Birmingham, Alabama.
In other developments, bank acquisitions of insurance brokers appear to be picking up from depressed levels. BancorpSouth agreed to acquire GEM Insurance Agencies, which has approximately $9 million in revenue and is based out of Houston, Texas. Old National Bancorp announced that it was acquiring a book of business from Wells Fargo Insurance's Evansville, Indiana office as well.
December 10, 2013
Edgewood Partners Insurance Center ("EPIC") has a new private equity owner after The Carlyle Group announced that it agreed to acquire a controlling equity stake in the company. Stone Point Capital, which funded the startup of EPIC in 2007, will remain an investor in the company. Headquartered in California, EPIC has approximately $80 million in annual revenue.
In the wholesale and reinsurance space, AmWINS Group announced that it is acquiring Bliss & Glennon and eReinsure from Fortegra Financial Corporation. Bliss & Glennon is an excess and surplus ("E&S") lines wholesale insurance broker and managing general agency ("MGA") and was ranked by Business Insurance in September 2013 as the 10th largest P&C wholesaler with $229 million in premium. eReinsure provides Internet-based technology solutions for managing the placement of facultative reinsurance.
November 6, 2013
Ryan Specialty Group announced another insurance wholesale broker acquisition with its agreement to merge with Westrope. Headquartered in Kansas City, Westrope is the 7th largest wholesale broker in the U.S. according to Business Insurance.
In the rumor mill, Edgewood Partners Holdings is reportedly being shopped around by its private equity owner, Stone Point Capital, according to a Bloomberg article. Edgewood (based in San Mateo, California) has over $80 million in revenue as listed on its website.
October 4, 2013
A couple of significant transactions outside of the traditional retail brokerage space made the news in September. Jardine Lloyd Thompson Group ("JLT") announced that it will be acquiring Towers Watson's reinsurance brokerage business for $250 million in cash. Towers Watson's reinsurance brokerage business generated revenue of $166 million and pretax profit of $26 million for the year ended June 30, 2013, making it the fourth largest reinsurance broker in the world. An article by The Insurance Insider that provides background on the events leading up to the deal can be viewed here by way of SNL.
In the wholesale arena, Ryan Specialty Group ("RSG") announced that it acquired S.H. Smith & Company, a wholesale broker with more than 90 employees. RSG is a holding company consisting of managing general agents ("MGAs"), managing general underwriters ("MGUs"), wholesale operations, a Lloyd's specialty insurer, and other entities offering specialty services to agents, brokers, and insurance carriers. RSG was formed by Patrick Ryan who previously was the founder and CEO of Aon.
September 6, 2013
Two more top 100 brokers officially announced a change in ownership as previously reported rumors became reality during the month of August. Hub International agreed to be acquired by Hellman & Friedman in a transaction valuing the company at approximately $4.4 billion. It was earlier reported (see May 3, 2013 post) that Hub's owners, Apax Partners and Morgan Stanley Principal Investments, had begun exploring a sale in April. Hub is projected to have 2013 revenue of $1.2 billion.
Meanwhile, Arthur J. Gallagher announced that it was acquiring Bollinger from Evercore Capital Partners. Total gross consideration was $312 million in cash and stock with net consideration being approximately $277 million once the value of tax assets acquired is factored in. Rumors had begun surfacing in February (see February 6, 2013 post) that Evercore had begun the sale process of Bollinger. The New Jersey-based broker is expected to generate over $100 million in revenue and approximately $40 million of EBITDAC (earnings before interest, taxes, depreciation, amortization, and the change in estimated acquisition earnout payables).
August 3, 2013
According to a Crain's Chicago Business article, Arthur J. Gallagher is in advanced discussions to acquire Bollinger Insurance. Bloomberg had previously reported (see February 6, 2013 post) that the owner of Bollinger, Evercore Partners, had begun gathering bids for the New Jersey-based insurance broker. The Bloomberg report mentioned that AssuredPartners, owned by GTCR, was also another top suitor in the bidding process.
July 8, 2013
Risk Strategies Company ("RSC") becomes the latest insurance broker to partner with a private equity firm after announcing that Kohlberg & Company has acquired a majority interest in the firm. Headquartered in Boston, RSC had 2011 revenue of $41 million according to Business Insurance's 100 largest brokers list. As part of the transaction, Roger Egan will join RSC as Executive Chairman after having previous stints as CEO of Integro and President at Marsh Inc.
June 12, 2013
Brown & Brown's acquisition of Beecher Carlson Holdings from Austin Ventures continues the trend of private equity backed brokers changing ownership. Beecher Carlson had net revenue of $105.6 million in 2012, with headquarters in Atlanta, Georgia. This transaction is expected to close in July of 2013.
May 3, 2013
A month after National Financial Partners ("NFP") announced that it was exploring a sale, the firm agreed to be acquired by Madison Dearborn Partners in a transaction valuing NFP's equity at approximately $1.3 billion. This private equity transaction is expected to close in the third quarter.
Meanwhile, another top 100 insurance broker may change hands as Hub International is reported to be in the initial stages of exploring a sale. Apax Partners and Morgan Stanley Principal Investments, the current owners of Hub, took the broker private in 2007. Hub had 2011 revenue of approximately $571 million according to Business Insurance's ranking of the 100 largest U.S. brokers.
April 5, 2013
National Financial Partners ("NFP") announced in the middle of March that it was exploring the potential sale of the company as a result of private equity overtures. TPG and Madison Dearborn Partners are currently rumored to be the final bidders for the company. NFP, which provides benefits, insurance, and wealth management services, had revenue of $1.1 billion during 2012.
March 4, 2013
Digital Insurance, a specialist in employee benefits for small and mid-sized companies, had an acquisitive month in February with the purchase of three benefits firms. Digital, itself, was recently acquired by Fidelity National Financial in January. Digital had approximately $50 million in revenue during 2012 and acquired 18 benefits agencies during 2011 and 2012.
Private equity activity also continues with Genstar Capital's acquisition of Acrisure, which is based out of Grand Rapids, Michigan. With a footprint primarily focused on the Midwest, Acrisure had 2010 revenue1 of $29 million and was previously owned by GCP Capital Partners. Genstar is no stranger to the insurance brokerage sector having recently sold Confie Seguros in November 2012.
1 Business Insurance - 100 Largest Brokers of U.S. Business - July 18, 2011
February 6, 2013
Rumors have been floating around that Evercore Capital Partners, the private equity owner of Bollinger, is exploring a sale of the top 100 insurance broker. Bollinger had approximately $118 million in 2011 revenue according to Business Insurance.
Meanwhile, another private equity firm, Lightyear Capital announced in January the closing of its controlling investment in Cooper Gay Swett & Crawford ("CGSC"). CGSC had revenue of $344 million and EBITDA of $69 million in 2011.
December 27, 2012
There was a flurry of deals during November and December as sellers were motivated in part to take advantage of current capital gains tax rates. As a result, several top 100 insurance brokers changed hands including:
In the middle market, Marsh & McLennan Agency continued its acquisition spree acquiring various agencies throughout the country such as Howalt+McDowell Insurance ($16 million in revenue and based in South Dakota), Protector Group ($14 million in revenue and based in Massachusetts), and Brower Insurance Agency ($24 million in revenue and based in Ohio).
On the wholesale side, AmWINS Group announced it was acquiring Gresham & Associates, which was ranked by Business Insurance as the sixth-largest managing general agent. AmWINS itself is under new ownership having been recapitalized by New Mountain Capital earlier this year.
1 Business Insurance - 100 Largest Brokers of U.S. Business - July 16, 2012
2 Insurance Journal - Top 100 Privately Held Property/Casualty Agencies - August 6, 2012
October 11, 2012
National Financial Partners ("NFP") continues the buildout of its property & casualty ("P&C") insurance business with the acquisition of Lane McVicker, a personal lines P&C provider to high net worth clients. Lane McVicker, having approximately $8 million of annualized revenue, was a portfolio company of Stone Point Capital. NFP had previously acquired Lapre Scali & Company Insurance Services in the middle of last year to serve as a platform for its P&C business. Lapre Scali had approximately $21 million in annualized revenue at the time of acquisition.
September 16, 2012
USI Insurance Services hasn't let rumors of its sale by a Goldman Sachs' private equity fund get in the way of its acquisition efforts. It picked up two significant bank-owned insurance brokerage operations, one from TD Bank having $58.2 million in revenue and one from BBVA Compass having $26.7 million in revenue, during the past few months.
July 17, 2012
The decision by the Supreme Court to uphold most of the healthcare reform law passed by Congress will likely lead to further acquisition activity of benefits firms. Some owners of benefits firms may decide that they need to align themselves with larger firms that have additional resources and capabilities to deal with the complexities of this healthcare reform legislation. Some views on the future role of insurance agencies in the group benefits business can be viewed here with East Coast and West Coast perspectives.
May 1, 2012
A synopsis of acquisition activity by the three primary groups of acquirers within the insurance brokerage sector is summarized below.