M&A Services, Inc. Newsletter Q4 2019
Letter from the CEO
We hope this finds you well and that your 2020 has started off with great success.
2019 was another successful year for M&A Services, granting the Firm again placement among the
“Top 3 Financial Advisory in Insurance Underwriter by Deal Volume”
according to the S&P Global – Market Intelligence
A highlight of some of our 2019 assignments included:
- JenCap Holdings LLC acquisition of Aran Insurance Services Group Inc.
- Employers Holdings Inc. acquisition of PartnerRe Insurance Co. of New York from Partner Reinsurance Co. of the US.
- Seeman Holtz Property & Casualty acquisition of Tailored Solutions.
- Transverse Insurance Group, LLC acquired Financial American P&C Insurance Company from Financial American Holdings Corp.
- Group One Thousand One, LLC acquisition of Lackawanna Insurance Group.
- National Western Life Group, Inc. acquisition of Ozark National Life Insurance, Inc. and N.I.S. Financial Services, Inc. from CNS Corp.
- Summit Risk Advisors completed a $100,000,000 recapitalization and senior debt facility with Colbeck Capital Management. M&A Services, Inc. served as financial advisor to Summit.
In January of 2020, we were pleased to announce:
- Transverse Insurance Group, LLC acquisition of Arrowood Surplus Lines Insurance Company.
Furthermore, the Firm was recognized with the following industry distinctions:
- CORPORATE/STRATEGIC DEAL OF THE YEAR ($100MM-$250MM) Acquisition of Lackawanna Insurance Group by Group 1001 – 18th Annual M&A Advisor Award
- INVESTMENT BANKER OF THE YEAR – Jason Murgio, CEO M&A Services, Inc. – 18th Annual M&A Advisor Award
- EMERGING LEADER AWARD –Paul Procops, VP M&A Services, Inc. – 10th Annual Emerging Leaders Award by The M&A Advisor.
Our extensive experience and understanding of both the brokerage and underwriting sectors set us apart from a number of our competitors within the insurance marketplace. We are humbled and honored for all the recognition we have received, as well as the loyalty and trust of new and existing clients throughout our 20+ years in business. With over 200 successful transactions completed we pride ourselves on offering incomparable concierge service on all assignments, while utilizing our relationships and our experience to provide a comprehensive range of insurance investment banking services.
We look forward to continuing our legacy of excellence, helping you achieve your corporate development goals in 2020, and to making this another very successful year for both our clients and our Firm.
Jason C. Murgio
Upcoming Industry Events
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.
Our advisors believe this interaction is critical to keeping pace with changing market conditions.
The list below represents select locations where our advisors will be available to meet with new and existing clients.
- Las Vegas, NV– March 1-4 – during ReFocus 2020
- Denver, CO– May 3-6 – during RIMS Annual Conference
- Tampa, FL – May 4-6 – for Target Markets Mid-Year Meeting
- San Diego, CA – September 13-16 – for WSIA Annual Convention
- Boston, MA– September 20-23 – during NAMIC Annual Convention
- Las Vegas, NV – September 21-23 – for InsureTech Connect 2020
- Colorado Springs, CO– October 2-6 – during CIAB Leadership Forum
- Orlando, FL – October 11-13 – during PCI Annual Meeting
- Scottsdale, AZ– October 19-21 – for 20th Annual Target Markets Summit
- Grand Cayman – December 1-3 – for IMAC/CCF 2020
If you would be interested in meeting with us please contact Vanessa Silva at firstname.lastname@example.org to schedule an appointment.
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:
- Widely Licensed admitted P&C Carrier available
- 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 email@example.com 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 firstname.lastname@example.org . 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 email@example.com
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 firstname.lastname@example.org . All inquiries will be held strictly confidential.
The market for Program business continues to develop. We have seen several new programs in the marketplace from Insure My Closing to Several Storm Indemnity. MGAs are moving away from the tried and true businesses, to a more specialized niche approach as carriers look to develop more top line premium.
In the broader marketplace, except for Workers Compensation, prices continue to be on the rise. Auto Liability has not crested yet and certain property exposures are still difficult to place. Carriers continue to struggle with losses and look to specialized programs to improve profitability. Automation and integration continue to be the lynchpin in successful programs. Intech has certainly created a stir, but it’s typically the basics that drive success.
Maybe related to the challenges is a number of changes in Leadership. Ironshore and Zurich have all made changes to their leadership in the Program space. As carriers look to improve results, expand distribution, create niche coverages, they look to Programs as a tried and true approach.
If we can help with any of your program needs, please feel free contact me. We will be attending the Target Market mid-year in Tampa in May. Let’s set up an appointment to meet if you are planning to attend.
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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