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Private equity-backed brokerage PCF Insurance Services LLC expects to nearly double its rate of acquisitions in 2021, potentially making it one of the top acquirers of insurance agents and brokerages for the year, its senior executives say.
The Woodland Hills, California-based company made 36 acquisitions in 2020, with most of the deals taking place after it was sold to a new private equity owner, Palo Alto, California-based HGGC LLC, in April.
“We’ve bought $1 million (revenue) agencies to $15 million agencies and everything in between,” Peter Foy, chairman and CEO of PCF, who formed the company’s founding agency in 1987, said in an interview Friday.
“We’ve got a tremendous pipeline, and we would expect to get close to doubling what we did last year,” he said.
According to data from Optis Partners LLC, PCF was the sixth most active brokerage acquirer in 2020. The most active acquirer was Acrisure LLC with 108 deals, followed by Hub International Ltd. with 64 deals. Prices paid for insurance brokers and agents remain at historical highs.
PCF’s most recent acquisition, which was announced last week, was Western States Insurance Agency Inc., a Spanish Forks, Utah-based brokerage that specializes in insurance for the agricultural and the residential construction sectors and has 10 staff.
Through the deals it has completed since the HGGC acquisition, PCF grew from about $70 million in revenue to $150 million in revenue by year-end 2020, and it expects to grow to $200 million by the end of the first quarter, said Jeremiah Jewkes, chief development and strategy officer.
“We still believe there’s a great opportunity out there, and we intend to be very active and very forward leaning in terms of finding new partnerships,” he said.
The business, which began with a benefits agency, is now 60% commercial property/casualty, 20% benefits and 20% personal lines, Mr. Jewkes said.
All the owners of the acquired agencies retain an equity stake in PCF and the brokerage has programs to allow all employees to purchase equity, he said.