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2018 brokerage revenue: $1.38B
Percent increase (decrease): 34.3%
Acrisure LLC first entered Business Insurance’s ranking of the Top 100 brokers of U.S. business six years ago at No. 85 with less than $30 million in 2012 revenue.
Today, after about 380 acquisitions, it’s one of the 10 largest brokers in the world with more than $1.3 billion in revenue.
The extraordinary growth of the Caledonia, Michigan-based brokerage, which specializes in placing insurance for small and medium-sized businesses, is founded on an ability to process triple-digit numbers of acquisitions annually and maintain solid organic growth.
Acrisure also operates under the radar, choosing not to announce most of its acquisitions and allowing the brokers and agencies it purchases to continue to operate under their existing names or with little or no associated corporate branding.
“They are the most aggressive acquirer in the business, having closed over 100 deals in 2018 and nearly 100 in 2017,” said Timothy J. Cunningham, managing director of Optis Partners LLC, a mergers and acquisitions advisory firm and consultancy in Chicago. “And their model is unique in that they don’t rebrand, and they allow their acquisitions to maintain their local identity.”
The brokerage also stands apart from many other acquisitive brokers with member firms owning most of the parent company, rather than giving majority ownership over to private-equity backers.
The ownership structure and maintenance of existing brands helps Acrisure attract high-quality firms, said John Wepler, chairman and CEO of Marsh, Berry & Co. Inc. in Woodmere, Ohio.
“Many firms that are growing and perpetuating and don’t need to do a transaction find this model refreshing, and they would not have sold had they not come in contact with this new, different environment,” he said. “They don’t look at it as an acquisition, they look at it as an investment.”
Founded in 2005 by CEO Gregory L. Williams, who had a background in banking and telecommunications, and Executive Vice President Ricky L. Norris, who had an insurance background, the firm acquires brokerages by paying most of the consideration in Acrisure stock.
“Because they are shareholders, they see the benefit of utilizing the resources we provide,” such as technological support and access to experts in other Acrisure units, Mr. Williams said. “From the inside out, we are very connected. They are not all flying the same flag, but they work very collaboratively together.”
Acrisure bought 102 businesses in 2018, compared with 59 by its closest rival. Most of the deals were sourced by people from firms previously bought by Acrisure, Mr. Williams said.
“We can do high-volume M&A because it’s not a disruptive process to the business that we’ve partnered with and we don’t have a heavy integration model at the time of the acquisition,” Mr. Williams said.
The firm expanded in the Midwest but adopted a national strategy in 2013 and raised private-equity capital. Following a management buyout in 2016, Acrisure is more than 80% owned by people working in the business, which reassures agencies that the firm won’t be “flipped” to a private equity firm or taken public, he said.
Last year, several of its private-equity investors — Blackstone Group LP, GSO Capital Partners and Tactical Opportunities — invested an additional $2 billion in Acrisure, largely by buying out or returning capital to other investors.
The size of the deals Acrisure completes varies, Mr. Williams said. “We do some deals for a $500,000 book of business, and we’ll soon be doing a deal with a company that’s got $90 million in revenue.”
Going forward, the brokerage is looking to do more larger deals, he said.
In addition, the firm wants to grow its international business. Last year, it bought reinsurance brokerage Beach & Associates Ltd., which has operations in Bermuda, London, Toronto and Zurich, as well as the United States. About 4% of Acrisure’s revenue is derived from businesses outside of North America, but “over the next 12 months, it might be as high as 7% or 8%,” Mr. Williams said.
“But it’s not just an M&A story,” Mr. Williams said. Over the past eight years, Acrisure’s average annual organic growth is close to 5%. In addition, it has an EBITDA margin — earnings before interest, tax, depreciation and amortization divided by revenue — of 37%, he said.
The growth has necessitated a larger head office, and Acrisure plans to move to a new location in Grand Rapids, Michigan, next year.
2018 brokerage revenue: $1.67B