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M&A Services Newsletter – Q1 2018

M&A Services Newsletter – Q1 2018

M&A Services Newsletter – Q1 2018

We are pleased to announce that Merger & Acquisition Services is celebrating its 20th Anniversary

During the past 20 years, the firm has utilized our relationships and experience to provide a comprehensive range of investment banking services to both our existing client base and new clients, solely within the insurance sector. All of the engagements undertaken by the firm involve senior advisors who play an active role throughout the entire assignment; a commitment that has always separated us from a number of our competitors in the insurance marketplace. Our business philosophy since the firm’s inception has been to provide unbiased, focused, and value-added advice to our clients and I am proud to say our team continues to deliver on that promise every day. We know the insurance industry and our advisors make each client’s project a priority, offering unparalleled concierge-level service. The firm has grown dramatically during this time, expanded its geographic presence and worked on hundreds of insurance related transactions involving insurance companies, runoff businesses, captives, risk retention groups, shell companies, MGA’s/MGU’s, wholesalers, retailers, third party administrators, capital raises, program placements and valuation opinions. Merger & Acquisition Services (M&A Services) has a long track record of completed transactions, working with both domestic and international clients. The firm has completed close to 200 insurance assignments and has been acknowledged as the Top Insurance Advisor by Deal Volume for Insurance Underwriters, as ranked by S&P Global Market Intelligence.

Some of our most recent transactions totaling over $100 million in deal value include:

  • The sale of Allianz Life & Annuity Company from Allianz Life Insurance Co. of North America to Munich RE (M&A Services served as the advisor to Allianz)
  • The acquisition of Investors Heritage Holdings & Investors Heritage Life Insurance Company by Aquarian LP (M&A Services served as the advisor to Aquarian)
  • The sale of Omaha Indemnity from Mutual of Omaha Insurance Co. to Hannover Re (M&A Services served as advisor to Mutual of Omaha)
  • The sale of ProSelect National Insurance Co. from Coverys by Clear Underwriters LLC (M&A Services served as the advisor to Coverys)
  • The pending sale of PartnerRe Insurance Co of New York to Employers Holdings Inc.

Most importantly however, throughout all of our years in business, M&A Services has maintained its core values: serve clients honestly, professionally and confidentially. All of M&A Services’ advisors are committed to these fundamental principles while at the same time helping clients achieve their corporate finance initiatives. M&A Services and our team of advisors would like to thank all of our clients for their trust and allowing us to assist in meeting their business developments objectives for the past two decades. Lastly, I would welcome prospective clients, both buyers and sellers, including; insurance carriers, MGA’s/MGU’s, agencies and third party administrators, to reach out to us and start a confidential conversation. We would be happy to share with you our unbiased advice, insight into industry trends and our dedicated guidance to aiding you achieving your strategic and financial goals. We hope 2018 is already shaping up to be another successful year for you and your business.

Sincerely,

Jason C. Murgio    
CEO

Upcoming Industry Events    
Upcoming Industry Conferences 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.

  • SAN ANTONIO, TX – April 15 – 18, 2018 for RIMS Annual Conference.
  • BALTIMORE, MD – May 7 – 9, 2018 during Target Markets Mid-Year Meeting.
  • ATLANTIC CITY, NJ – June 10 -12, 2018 for PIA of New Jersey and New York Annual Conference.

If you would be interested in meeting with us please contact Vanessa Silva at vsilva@maservices.com to schedule an appointment.

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 dbaransky@maservices.com. All inquiries are kept confidential and you incur no obligation to M&A Services

Shells    
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 authorized Excess & Surplus Lines company with national authorizations  Small Southeast Admitted Carrier  WANTED – Client seeking Widely Licensed P&C Admitted Carrier Please contact Paul Procops at pprocops@maservices.com to learn more about the process and the opportunities above.

Distribution    
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 chughes@maservices.com

Agency Financing    
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 tmurgio@maservices.com . All inquiries will be held strictly confidential.

Program Insurance    
The appetite for MGU/MGA programs will continue to strengthen in 2017. Many carriers have recognized that organic    
growth will continue to be challenged as rates continue to soften. Mergers and acquisitions will continue to be one    
source of potential growth. Also, program managers are seeking a second carrier to diversify their book of business    
and seeking geographic expansion. Carriers have learned that partnering with a quality program administrator can    
be very profitable. Competition in the program space will continue to grow which will lead to more ingenuity and    
creative opportunities.    
For more information on programs and how our Program Team might help your MGA/MGU, please contact Frank    
See at fsee@maservices.com or Paul Surdel at psurdel@maservices.com .    
Insurance Programs services offered:  

  • Represent MGAs/MGUs seeking program insurance carriers  
  • Our program carrier relationships are now over 60 and growing  
  • Represent MGAs/MGUs seeking fronting program insurance carriers requiring 100% quota share reinsurance  
  • Represent wholesale brokers seeking to bundle certain profitable homogeneous books of business into    
    insurance programs  
  • Represent underwriting start-up groups seeking program design and placement consultation

M&A Recent Programs Placed:  

  • Placed an E&S Tier 1 Homeowners program for a southeastern MGA. Program placed with an “A+” carrier,    
    allowing the MGA to write business in the southeastern and mid-Atlantic states  
  • Placed a Surety contractors bond program for a western MGA. Program placed with a regional mid western carrier that was looking to expand their surety writings on the west coast  

Current Opportunity:  

  • Seeking Cal WC provider to partner on a unique WC program opportunity. Specialized focus and innovative product delivery creating substantial savings on loss costs for WC claims  
  • Seeking commercial/private passenger automobile liability provider on Rideshare program opportunities.

Our Services    
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 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  
  • Fronting  
  • Reinsurance    
    CALL US TODAY at 212-750-0630 for a confidential consultation with one of our senior advisors.

Investment banking services and all securities are offered in the United States by and through Merger & Acquisition Capital Services, LLC, a US registered broker-dealer and member FINRA/SIPC. Merger & Acquisition Services, Inc., M&A International LTD & M&A International Corporation U.A. do not underwrite securities, nor advise on, nor effect transactions in securities for the account of others.

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.

Copyright 2018 Merger & Acquisition Services, Inc. & Merger & Acquisition Capital Services, LLC. All Rights Reserved

M&A Services Newsletter – Q1 2018
  • Jan 11, 2018

M&A Services Newsletter – Q1 2018

We are pleased to announce that Merger & Acquisition Services is celebrating its 20th Anniversary

During the past 20 years, the firm has utilized our relationships and experience to provide a comprehensive range of investment banking services to both our existing client base and new clients, solely within the insurance sector. All of the engagements undertaken by the firm involve senior advisors who play an active role throughout the entire assignment; a commitment that has always separated us from a number of our competitors in the insurance marketplace. Our business philosophy since the firm’s inception has been to provide unbiased, focused, and value-added advice to our clients and I am proud to say our team continues to deliver on that promise every day. We know the insurance industry and our advisors make each client’s project a priority, offering unparalleled concierge-level service. The firm has grown dramatically during this time, expanded its geographic presence and worked on hundreds of insurance related transactions involving insurance companies, runoff businesses, captives, risk retention groups, shell companies, MGA’s/MGU’s, wholesalers, retailers, third party administrators, capital raises, program placements and valuation opinions. Merger & Acquisition Services (M&A Services) has a long track record of completed transactions, working with both domestic and international clients. The firm has completed close to 200 insurance assignments and has been acknowledged as the Top Insurance Advisor by Deal Volume for Insurance Underwriters, as ranked by S&P Global Market Intelligence.

Some of our most recent transactions totaling over $100 million in deal value include:

  • The sale of Allianz Life & Annuity Company from Allianz Life Insurance Co. of North America to Munich RE (M&A Services served as the advisor to Allianz)
  • The acquisition of Investors Heritage Holdings & Investors Heritage Life Insurance Company by Aquarian LP (M&A Services served as the advisor to Aquarian)
  • The sale of Omaha Indemnity from Mutual of Omaha Insurance Co. to Hannover Re (M&A Services served as advisor to Mutual of Omaha)
  • The sale of ProSelect National Insurance Co. from Coverys by Clear Underwriters LLC (M&A Services served as the advisor to Coverys)
  • The pending sale of PartnerRe Insurance Co of New York to Employers Holdings Inc.

Most importantly however, throughout all of our years in business, M&A Services has maintained its core values: serve clients honestly, professionally and confidentially. All of M&A Services’ advisors are committed to these fundamental principles while at the same time helping clients achieve their corporate finance initiatives. M&A Services and our team of advisors would like to thank all of our clients for their trust and allowing us to assist in meeting their business developments objectives for the past two decades. Lastly, I would welcome prospective clients, both buyers and sellers, including; insurance carriers, MGA’s/MGU’s, agencies and third party administrators, to reach out to us and start a confidential conversation. We would be happy to share with you our unbiased advice, insight into industry trends and our dedicated guidance to aiding you achieving your strategic and financial goals. We hope 2018 is already shaping up to be another successful year for you and your business.

Sincerely,

Jason C. Murgio    
CEO

Upcoming Industry Events    
Upcoming Industry Conferences 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.

  • SAN ANTONIO, TX – April 15 – 18, 2018 for RIMS Annual Conference.
  • BALTIMORE, MD – May 7 – 9, 2018 during Target Markets Mid-Year Meeting.
  • ATLANTIC CITY, NJ – June 10 -12, 2018 for PIA of New Jersey and New York Annual Conference.

If you would be interested in meeting with us please contact Vanessa Silva at vsilva@maservices.com to schedule an appointment.

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 dbaransky@maservices.com. All inquiries are kept confidential and you incur no obligation to M&A Services

Shells    
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 authorized Excess & Surplus Lines company with national authorizations  Small Southeast Admitted Carrier  WANTED – Client seeking Widely Licensed P&C Admitted Carrier Please contact Paul Procops at pprocops@maservices.com to learn more about the process and the opportunities above.

Distribution    
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 chughes@maservices.com

Agency Financing    
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 tmurgio@maservices.com . All inquiries will be held strictly confidential.

Program Insurance    
The appetite for MGU/MGA programs will continue to strengthen in 2017. Many carriers have recognized that organic    
growth will continue to be challenged as rates continue to soften. Mergers and acquisitions will continue to be one    
source of potential growth. Also, program managers are seeking a second carrier to diversify their book of business    
and seeking geographic expansion. Carriers have learned that partnering with a quality program administrator can    
be very profitable. Competition in the program space will continue to grow which will lead to more ingenuity and    
creative opportunities.    
For more information on programs and how our Program Team might help your MGA/MGU, please contact Frank    
See at fsee@maservices.com or Paul Surdel at psurdel@maservices.com .    
Insurance Programs services offered:  

  • Represent MGAs/MGUs seeking program insurance carriers  
  • Our program carrier relationships are now over 60 and growing  
  • Represent MGAs/MGUs seeking fronting program insurance carriers requiring 100% quota share reinsurance  
  • Represent wholesale brokers seeking to bundle certain profitable homogeneous books of business into    
    insurance programs  
  • Represent underwriting start-up groups seeking program design and placement consultation

M&A Recent Programs Placed:  

  • Placed an E&S Tier 1 Homeowners program for a southeastern MGA. Program placed with an “A+” carrier,    
    allowing the MGA to write business in the southeastern and mid-Atlantic states  
  • Placed a Surety contractors bond program for a western MGA. Program placed with a regional mid western carrier that was looking to expand their surety writings on the west coast  

Current Opportunity:  

  • Seeking Cal WC provider to partner on a unique WC program opportunity. Specialized focus and innovative product delivery creating substantial savings on loss costs for WC claims  
  • Seeking commercial/private passenger automobile liability provider on Rideshare program opportunities.

Our Services    
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 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  
  • Fronting  
  • Reinsurance    
    CALL US TODAY at 212-750-0630 for a confidential consultation with one of our senior advisors.

Investment banking services and all securities are offered in the United States by and through Merger & Acquisition Capital Services, LLC, a US registered broker-dealer and member FINRA/SIPC. Merger & Acquisition Services, Inc., M&A International LTD & M&A International Corporation U.A. do not underwrite securities, nor advise on, nor effect transactions in securities for the account of others.

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.

Copyright 2018 Merger & Acquisition Services, Inc. & Merger & Acquisition Capital Services, LLC. All Rights Reserved

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