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Broker mergers maintaining a brisk pace

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Broker mergers maintaining a brisk pace

Merger and acquisition activity among agents and brokers continued apace in 2018, according to a survey released Thursday by analyst advisory firm Marsh, Berry & Co. Inc.

The company’s M&A Trends 4Q18 report on insurance agency and broker transactions said 552 deals occurred in 2018, just shy of the 557 deals struck the prior year.

However, it is “highly likely that the 2018 deal count will exceed this number once the dust settles and all announcements are made,” Phil Trem, executive vice president of MarshBerry in Woodmere, Ohio, wrote in the report.

Deals continued to grow in value as well, according to the survey. “We are seeing pricing as high as 11x paid at closing for firms who would barely make the Business Insurance Top 100 insurance broker listing. These valuations were historically reserved for the national brokers. However, demand for high-quality firms and the need to deploy capital continues to create favorable market conditions for selling brokers,” Mr. Trem wrote in the report.

Major reinvestment by private equity firms continued in 2018, with Hub International Ltd. and Acrisure LLC — both top acquirers in 2018 — taking on new private capital in the fourth quarter. “This continued interest and investment is a strong indication that demand will continue in at least the short term,” Mr. Trem said.

According to the report, the top buyers in announced U.S. transactions in 2018 were Acrisure LLC with 59, BroadStreet Partners Inc. with 37 and Alera Group Inc. with 33. All three are private equity-backed ventures, as are the rest of the top 10 buyers in announced U.S. transactions except Arthur J. Gallagher & Co. and Brown & Brown Inc.

 

 

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