BRP reports sharp rise in revenue; sees fewer acquisitions ahead

BRP Group Inc., the parent company of broker Baldwin Risk Partners LLC, on Tuesday reported steep increases in organic and overall revenue in the fourth quarter as it closed in on $1 billion in annual revenue.

Looking ahead, the Tampa, Florida-based brokerage’s top executive said it will likely focus on reducing debt rather than mergers and acquisitions in 2023 as higher interest rates hit the M&A sector.

BRP, which went public in 2019, reported $246 million in fourth-quarter revenue, a 54.6% increase over the same period last year. On an organic basis, which excludes acquisitions and other factors, revenue increased 26%, BRP said in its earnings statement.

The brokerage reported a net loss of $91.5 million for the quarter, compared with a $44.4 million loss in the 2021 period.

For the full year, BRP reported $980.7 million in revenue, up 72.9% compared with 2021, and a net loss of $76.7 million, compared with a $58.1 million loss a year earlier.

In April 2022, BRP completed the acquisition of Westwood Insurance Agency, a personal lines-focused distribution platform and BRP’s largest acquisition to date. BRP staff numbers have grown to nearly 4,000, compared with 500 at the time of its initial public offering, said CEO Trevor Baldwin on a conference call with analysts late Tuesday.

BRP will likely focus on organic growth over acquisitions in 2023, Mr. Baldwin said. The M&A market is in transition, he said.

“The reality is the cost of capital is up meaningfully. We have not yet seen that be fully reflected in valuations and as a result a lot of the larger, higher performing businesses are choosing not to come to market,” Mr. Baldwin said.