M&A Services, Inc. Newsletter Q1 2020
Letter from the CEO
We hope this finds you well and that your colleagues and loved ones are also safe and healthy.
Like most companies around the world, we at M&A Services have quickly and effectively adapted to this unprecedented time to ensure uninterrupted services to our new and existing clients, while at the same time ensuring the wellbeing of our entire team.
While the world has been changed in so many ways and instability seems to reach into every industry, we feel that the majority of Insurance M&A Market continues to be strong. While the process for deals has changed, acquisition or liquidity options exist and our ongoing deals remain on track to close as planned.
With our extensive experience and valuable business connections gathered over the past 20 years, we are capable, even in these uncertain times, of delivering successful results and exceptional concierge-level service to help you carry on with you corporate development plans.
We are always available over email, phone or video call to answer any questions related to your corporate strategic goals.
Please reach out to any of our advisors directly. Additionally, in lieu of all the Spring insurance conferences that have unfortunately been cancelled and postponed due to COVID-19 threats you may contact Vanessa Silva at firstname.lastname@example.org to schedule a meeting with our team members to discuss your business development needs or to start a conversation about the future of your business.
All inquiries are kept strictly confidential and we will be pleased to hear from you.
Virtual Meetings and Conference Calls
Throughout the year M&A Services travels to numerous locations, whether hosting a hospitality suite, serving as a panel speaker or just being on hand to meet face to face with clients and prospective clients to discuss the insurance marketplace.
Given the present challenges and changes posed by the COVID-19 pandemic, several industry events have been cancelled or postponed, making it difficult for in-person meetings.
However, our advisors believe that interaction is critical to keeping pace with changing market conditions, especially at this unprecedented time.
Our team is available for virtual meetings and conference calls to address any questions you may have regarding new strategies that are available to carry on with your corporate development goals.
Please don’t hesitate to contact Vanessa Silva at email@example.com to schedule an appointment.
All inquieries are kept strictly confidential.
M&A Services is considered to be the trusted source for insurance companies and agencies that seek to start up an insurance carrier operation, expand their geographic footprint or enter the US insurance market. Successfully completing over 100 Insurance Shell Company transactions in the past 10 years, M&A Services continues to be the leading advisor throughout the United States.
M&A Services brings a team of senior financial advisors who can assist in all matters of a transaction and are available to discuss the process of buying and/or selling an Insurance Shell Company.
Current L&H Opportunities:
- Wanted – Client seeking widely licensed life, annuity or health company
- Single state L&H New York Shell
Current P&C Opportunities:
- Wanted – Client seeking widely licensed P&C Carrier Shell
- Single State NJ Carrier, pre-84 premium tax advantage available
- UK agency “shell” company with UK regulatory authorizations for insurance/investments intermediation, advice and administration
- Bermuda Class 3A Reinsurance Shell for sale
Please contact Paul Procops at firstname.lastname@example.org to learn more about the process and the opportunities above.
Active Project – Grant
M&A has been retained by leading technology company with a 20 year track record. This client is seeking retail nonstandard auto insurance agencies to partner with and/or acquire in order to provide SR22 insurance policies to their existing client base of approximately 100,000 users nationwide.
For more information on this project please contact Dan Baransky.
Active Project – Alliance
M&A has been retained by a well-capitalized insurance group looking to acquire, through a loss portfolio transfer or reinsurance agreement, blocks of annuity (fixed or variable), life and/or Long Term Care Business. Our client is well versed in the management of these books of business and looking for carrier partners who seek a long term solution for blocks of business which are no longer core to their operations.
MGA Book Roll
M&A Services’ Book Roll offers a unique opportunity for Program Managers and MGA’s to maximize the fee income stream of their existing books of business without selling their agency. This strategy is ideal for principals that recognize the value of the business they produce but not interested in divesting ownership. It allows agency owners to extract the embedded value of stable, low loss ratio business by partnering with highly rated paper who can assist and foster growth of existing books of profitable business.
The program provides the following benefits for agency principals:
- Allows the principals the ability to monetize their agency immediately without giving up any control or ownership
- Continue to receive a market based commission structure
- Partnership with established, financially sound, committed “A” rated carriers
- A long term appointment contract offering stability and consistency in your markets
- There is no financial obligation borne by the program manager to participate as M&A Services’ fees are borne by the carrier
M&A Services has nearly two decades of experience in the insurance sector, working with carriers, program managers and agencies, allowing us to help parties maximize their revenue stream. If you would be interested in learning more about how this Book Roll program works and if your agency might qualify, please contact Danial Baransky directly at email@example.com . All inquiries are kept confidential and you incur no obligation to M&A Services.
The valuation and market for insurance distribution businesses is at an unprecedented peak over the past twelve months and is expected to remain high for the next six to eighteen months. Industry valuations are driven primarily by private equity capital that has made significant platform investments in the past three years, leveraging 3:1 and 4:1 with historically low interest rate debt.
Further, stock market prices and trading multiples for publicly traded brokerage firms are at all-time highs, allowing the publicly traded acquirers to compete with the private equity aggregators at the higher valuations. This combination of low interest rate leveraged private equity capital and high priced publicly traded companies has created an expansive and competitive landscape for insurance distribution assets, and therefore, increased the multiples of earnings (EBITDA) valuations for small and mid-sized distribution assets.
Currently, the market is priced at approximately a 50% premium to valuations from two to three years ago.
For more information on Distribution please contact Chris Hughes directly at firstname.lastname@example.org
Through our registered broker-dealer Merger & Acquisition Capital Services, LLC we develop custom financing solutions for agencies of all sizes.
M&A Services’ team of experienced dealmakers advises our clients through all aspects of capital financing and M&A transactions including sourcing lenders, producing offering memorandums, and assisting in preparing presentations for potential lenders and equity partners.
M&A Services’ expertise and industry knowledge allow us to approach a diverse cross section of capital providers simultaneously which often reduces the total time to fund transactions. Because M&A manages the entire process, agency owners are free to focus on running their business rather than managing the capital raising effort.
If you are currently looking to raise capital for your agency, or MGA, to fund an acquisition, a partner buy-out / buyin, or to refinance existing agency debt, contact us today to learn how Merger & Acquisition Capital Services can develop a customized solution for you.
Please contact Trevor Murgio directly at email@example.com . All inquiries will be held strictly confidential.
I am not sure about you, but working from home for the past 3 months has not been what I would have expected. It has given some the ability to focus more on opportunities in the market, have deeper discussions with their clients and their need. And I for one, have been overwhelmed with all the Insurance news coming at me from various sources.
Unfortunately, as with CICA, Targets Markets mid-year event had to be cancelled. And in the spirit of our current environment, VCIA is planning a virtual event later this fall. While these events limit our ability to interact and forge new relationships, discussions on new programs continue.
I do believe in times of confusion and concern, there is opportunity for those who have a strong focus and look to the future. The pause in the current business world can stress both programs and ideologies. And this will present those who are prepared a chance to execute their plan, or change their course.
If we can help with any of your program needs, please feel free contact me.
Managing Director of Insurance Programs
Merger & Acquisition Services is a boutique investment bank, specialist advisory and financial services firm devoted specifically to participants within the insurance industry.
Our mission is to provide concierge-level services and expertise within the insurance industry by assisting firms with their corporate development and acquisition/divestiture objectives. M&A Services has closed nearly 200 transactions over the past 20 years and has earned continuous placement within the “Top 5 Financial Advisors in Insurance Underwriting” according to S&P Global Market Intelligence/SNL Financial.
Our Services include:
- Carrier M&A Transactions
- Agency M&A Transactions
- Agency Financing
- Capital Raising
- Strategic Advisory
- Valuation Services
- Program Business
- Renewal Rights
CALL US TODAY at 212-750-0630 for a confidential consultation with one of our senior advisors.
Any information provided herein is indicative only, subject to change without notice, and does not constitute an offer to purchase or sell. Principals retain the exclusive right to negotiate and evaluate any transactions, and advisors of Merger & Acquisition Services, Inc. and Merger & Acquisition Capital Services, LLC. have no authority to do so. Merger & Acquisition Services, Inc. does not underwrite securities, nor advise on, nor effect transactions in securities for the account of others.
* Investment banking services and securities transactions are provided through and completed by Merger & Acquisition Capital Services, LLC., a broker-dealer registered with the U.S. Securities and Exchange Commission and member of FINRA and SIPC.
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