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Broker mergers reach new heights: Optis

Posted On: Oct. 8, 2019 11:28 AM CST

Broker mergers

Insurance broker merger and acquisition activity continues at a brisk pace, with 490 transactions through the first nine months of 2019, the highest nine-month total recorded, according to a report by Optis Partners LLC released Monday.

The number of deals bested 2018’s nine month transaction total of 481, while the 158 transactions in the year’s third quarter was the second-highest third-quarter total recorded after 2018’s 174.

The 649 transactions over the past 12 months was the second-highest 12-month total recorded after the 672 recorded through the second quarter of 2019, according to Optis, a Chicago-based M&A advisory firm.

Private equity-backed brokers completed almost two-thirds of all deals as Caledonia, Michigan-based Acrisure LLC led all buyers with 71 transactions through the nine months, followed by Chicago-based Hub International Ltd. with 37, Arthur J. Gallagher & Co. and Columbus, Ohio-based BroadStreet Partners Inc. with 27 each, and Lake Mary, Florida-based AssuredPartners Inc. with 26, the report said.

Ranges are bounded on the low side by 2016’s nine-month total of 355 transactions and 2015’s yearly total of 457 transactions, according to data in the report.

Acrisure completed 101 transactions in 2018 but just 63 in 2016, with the total climbing each year. Hub’s 59 transactions in 2018 bested 2017’s 49 and 2016’s 45, the data showed.

Gallagher added another half-dozen in 2018 to 36 transactions from 30 in 2017 and 24 in 2016, while BroadStreet increased to 34 transactions in 2018 from 27 in 2016, and AssuredPartners climbed to 37 transactions in 2018 from 28 in 2016, the data showed.

Optis said there are “no signs of any slow-down in M&A activity” and that “agency valuations continue pushing new upper limits,” despite recent economic data being “somewhat mixed” but generally less optimistic.

The market “will have to wait and see what, if any, impact this has on buyer appetites and valuation practices,” the Optis report said.