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North American Agent & Broker 2021Year-end Merger & Acquisition Report1January 2022
Table of Contents2021 Agent M&A ReportObservationsSummary InformationMost Active BuyersTotals by Buyer / Seller TypeSignificant TransactionsAppendix2Page 3Page 6Page 9Page 10Page 13January 2022
OPTIS Partners ViewObservations & CommentsPage 3 Given the concern regarding the anticipated increase in capital gains tax rates and thecontinued flood of capital into the insurance distribution industry acquirers, 2021 deal activityoutpaced records set in the prior year. After a slight Q1 dip in activity, each of the successivequarters in 2021 increased significantly over the prior year and the previous quarter. Totaltransactions in the Q4 2021 were 384, 26% greater that of the same period in 2020, and totaldeals for 2021 were 1,034, fully 30% higher than what was recorded in 2020. The underlying drivers fueling this increase are the same as those in the prior year: agingowners facing a concern regarding an increase in capital gains and inadequate perpetuationplans meeting up with investors flush with massive amounts of capital. The passage of time isonly increasing the impact of each of these drivers.
OPTIS Partners ViewObservations & Comments(continued)Page 4 The big question: How long will this last? No one knows for sure, but private equity and otherinvestors are likely able to handle an increase in interest rates, which may have a slightdownward effect on valuation. Yet at the same time more private equity and other investorsare coming into this space, which will most likely counter that pressure. The impact on aperceived increase in capital gains tax has likely played out. Activity in 2022 will likelycontinue at a rapid pace, though probably off its 2021 peak. There were 18 large agency transactions (defined as 30 million in revenue), and largeprivately held firms continue to be increasingly acquisitive (e.g., IMA and Heffernan). We seethis trend continuing.
OPTIS Partners ViewHighlights of 2021 M&A ActivityPage 5 1,034 transactions in 2021, up from 795 in 2020 384 transactions in Q4-2021, 26% more that in the same period in 2020 Acrisure led all buyers with 122 transactions in 2021, outpacing their 5-year average of 104deals per year Following were PCF Insurance (99 deals in 2021), Hub (61), High Street Partners (56),Assured Partners (51), and World Insurance Associates (49). Both PCF and High Streetrecapitalized during the year while dramatically increasing deal counts Private Equity-Backed / Hybrid (“PE/Hybrid”) buyers were responsible for 76% of allannounced transactions in 2021, up from 70% in 2020 Baldwin Risk Partners continues to be the most active acquirer of top 100 firms by size(RogersGray, JGS, WG&B, and Construction Risk in 2021)
Summary InformationQuarterly M&A Activity450400350300250200150100500Q1'12Page Q3Q1'20Q3Q1'21Q3
Summary InformationQuarterly M&A age 7Q2Q32020Q42021
Summary InformationAgency Acquisitions By 36502018201936232627020002012Page 820132014201720202021
Most Active BuyersBuyers With 20 or More Deals in 2021BuyerAcrisurePCF InsuranceHub InternationalHigh Street PartnersAssuredPartnersWorld Insurance AssociatesAlera GroupBroadStreet PartnersRelation InsurancePatriot Growth Insurance ServicesThe Hilb GroupGallagherRisk Strategies CompanyOneDigitalSub-totalsAll OthersTotals for YearPage 9Buyer 112361027274369643
Totals By Buyer / Seller TypeRolling 12-Month Activity by Buyer Type (% 3Q3Q1'14Q3Q1'15OtherPage idQ3Q1'20Q3Q1'21Q3
Totals By Buyer / Seller TypeRolling 12-Month # Transaction by Buyer Type900Virtually all of the growth in the number of M&Atransactions has come from the expansion of thePE/Hybrid buyers’ activity while the other groupshave remained relatively stable over the past 10 Q3Q1'15Q3PE / HybridPage '20Q3Q1'21Q3
Totals By Buyer / Seller TypeRolling 12-Month Activity by Seller Type (% 3Q3Q1'14Q3Q1'15P&CPage 12Q3Q1'16PC / EBQ3Q1'17EBQ3Q1'18All OtherQ3Q1'19Q3Q1'20Q3Q1'21Q3
Significant TransactionsSignificant Broker Transactions in 2021Page 13SellerBuyerRevenueDateMurray Insurance Associates(Lancaster, PA)AssuredPartners 31 millionJanuary 2021Fifth Third Insurance Agency(Cincinnati, OH)Foundation Risk Partners 35 millionJanuary 2021AP Intego(Waltham, MA)NEXT Insurance 33 millionMarch 2021Fiorella Insurance Agency(Stuart, FL)AssuredPartners 33 millionMarch 2021Worldwide Facilities(Los Angeles, CA)AmWINS Group 165 millionMarch 2021Confie Seguros(Huntington Beach, CA)Alliant 475 millionApril 2021
Significant TransactionsSignificant Broker Transactions in 2021 (Continued)Page 14SellerBuyerRevenueDatePayneWest(Missoula, MT)Marsh McLennan Agency 134 millionApril 2021Sterling Seacrest Pritchard(Atlanta, GA)Merger 70 millionApril 2021Bolton(Pasadena, CA)IMA 57 millionMay 2021Constellation Affiliated Partners(New York NY)Truist 160 millionMay 2021ABD Insurance & Financial Services(San Mateo, CA)Newfront Insurance 112 millionJuly 2021RogersGray(South Dennis, MA)BRP 39 millionJuly 2021
Significant TransactionsSignificant Broker Transactions in 2021 (Continued)Page 15SellerBuyerRevenueDatePropel Insurance(Tacoma, WA)Alera 117 millionSeptember 2021Jacobson, Goldfarb & Scott(Holmdel, NJ)BRP 38 millionOctober 2021Parker Smith Feek(Seattle, WA)IMA 82 millionNovember 2021Wood, Gutmann & Bogart(Tustin, CA)BRP 37 millionNovember 2021Construction Risk Partners(Branchburg, NJ)BRP 33 millionDecember 2021PSA Insurance & Financial Services(Hunt Valley, MD)The Hilb Group 32 millionDecember 2021
Significant TransactionsPrivate Equity Backed Ownership Changes in 2021Page 16Insurance AgencyLead Buyer / InvestorDescriptionDateIntegrated Specialty Coverage(New York, NY)KKRMajority InvestmentMarch 2021Strategic Insurance Agency Alliance (SIAA)(Hampton, NH)Odyssey InvestmentPartnersMajority InvestmentMarch 2021High Street Insurance Partners(Traverse City, MI)AbryPurchase from HuronCapitalApril 2021King Insurance(Gainesville, FL)BHMSMajority InvestmentJuly 2021Patriot Growth Insurance Services(Ft. Washington, PA)GI PartnersMajority InvestmentSeptember 2021
Significant TransactionsPrivate Equity Backed Ownership Changes in 2021(Continued)Page 17Insurance AgencyLead Buyer / InvestorDescriptionDatePCF Insurance(Sandy, UT)Owl Rock and PCF MgmtMajority InvestmentNovember 2021TRICOR(Tomah, WI)J.C. Flowers & CompanyMajority InvestmentNovember 2021Brightway Insurance(Jacksonville, FL)GrowthCurve CapitalMajority InvestmentDecember 2021Velocity Risk Underwriters(Nashville, TN)Oaktree CapitalManagementMajority InvestmentDecember 2021
Appendix 1: Ownership of Active Private Equity Backed BuyersNote: some of the above may have been privately owned before private equity ownership
Appendix 2: Active Buyers - Private Equity / HybridPE / HybridPE Sponsor (if applicable)201720182019202020215 YearTotalsTop Buyers since 2017:12345678910AcrisureHub InternationalBroadStreet PartnersAssuredPartnersAlera GroupPCF InsuranceWorld Insurance AssociatesOneDigitalThe Hilb GroupNFPActive BuyersAll OthersTotal TransactionsManagement/Various PE InvestorsHellman & Friedman / AtlasCanadian Pension FundGTCRGenstar CapitalOwl RockCharlesbank CapitalNew Mountain Capital/OnexCarlyleMadison Dearborn / 5282591,9236903854344515567872,613
Appendix 3: Active Buyers - Privately OwnedPrivately Owned201720182019545331242216202020215 YearTotalsTop Buyers since 2017:1234T5T578910Cross InsuranceTrueNorth CosWestland Insurance GroupHeffernan Insurance BrokersLeavitt GroupRyan Specialty GroupIMA Financial GroupKaplansky InsuranceLiberty Company Insurance BrokersElement Risk ManagementActive BuyersAll OthersTotal 211196470666
Appendix 4: Active Buyers - Publicly TradedPublicly Traded5 Year20172018201920202021Top Buyers since 2017:1234GallagherBrown & BrownBaldwin Risk PartnersMarsh McLennan Agencies3083623341946Active BuyersAll Others427Total 2861968607058305
Appendix 5: Active Buyers - BanksBanks201720182019202020215 YearTotalsTop Buyers since 2017:123T4T4T4TruistEastern BankWestern Financial GroupColony BankcorpLake Michigan Credit UnionTowneBankActive BuyersAll OthersTotal 23197171682
Appendix 6: Active Buyers - All OthersAll Others201720182019202020215 YearTotalsTop Buyers since 2017:12T3T3T5T5T5T5T5T5Co-operaters General Insurance Co.Intact Financial CorpBoston Omaha (General Indemnity Group)Tokio MarineAmynta GroupArch Capital GroupArdonagh Global PartnersLiberty MutualNavSav InsuranceTravelersActive BuyersAll OthersTotal 59303719814121467
Connect with us:Tim te:Dan comSteve Germundson612-718-0598germundson@optisins.com24
OPTIS Partners View Page 5 Highlights of 2021 M&A Activity 1,034 transactions in 2021, up from 795 in 2020 384 transactions in Q4-2021, 26% more that in the same period in 2020 Acrisure led all buyers with 122 transactions in 2021, outpacing their 5-year average of 104 deals per year Following were PCF Insurance (99 deals in 2021), Hub (61), High Street Partners (56),
