A Race to the Fiscal Cliff Finish Line
An Unprecedented December Caps a
The Times Square ball dropped. The clock struck midnight.
The champagne was flowing. Some were reveling in their
successes of 2012, others were thinking about their resolutions
for 2013. The insurance distribution M&A space took a
collective breath and reveled in its many accomplishments.
The year turned out to be the largest year for deal count in
history with a total of 312 deals completing prior to the
feared Fiscal Cliff. 2012 eclipsed the prior annual record from
2008 in which 297 transactions were completed. The feared
increase to capital gains taxes turned out to be a reality
when, as expected, Congress allowed the federal capital gains
rates to climb to 20% for individuals with taxable income
greater than $400,000.
The market was even busier than anticipated with a total of
24 deals in November and an unprecedented 64 transactions in
December compared to 17 and 34, respectively, in 2011. Arthur
J. Gallagher continued to lead the way with a total of 11 deals
completed during this two month time frame. They ended the year
with 35 deals in the United States more than doubling their
total of 17 from the prior year.
AssuredPartners, new to the buyer party as of late 2011,
made a splash this year finishing in 2nd place with 25 deals
completed including a combined 10 transactions in November
& December. Some of these transactions were foundation
acquisitions and others were bolt on or spoke acquisitions made
by one of their four platforms.
Hub International rounded out the top 3 with a total of 9
deals completed in the final months of the year bringing their
annual total to 22 deals. One of these acquisitions developed a
new platform in Oklahoma with the acquisition of CFR, Inc.
based in Tulsa.
Brown & Brown (“B&B”) and Marsh &
McLennan Agency (“MMA”) finished the year in a 5th
place tie with an annual total of 12 deals. B&B finished
the year strong with a total of six deals in the final two
months. MMA ended the year with five transactions in the last
two months, including the formation of their Midwest hub with
the acquisition of Brower Insurance Agency headquartered in
While in the midst of this transaction frenzy and what may
certainly have been a first, three of our top ten buyers in
2012 actually sold/recapitalized themselves in the 4th quarter
while continuing to complete transactions.
- Confie Seguros Insurance
Services completed seven deals in the last few months of
the year for a total of eighteen deals in 2012 (4th in total
deals). Their private equity partner Genstar Capital sold their
majority interest to Boston based ABRY Partners.
- USI Holdings Corporation
completed two deals in December bringing their annual total to
eleven transactions. Their private equity partner Goldman Sachs
sold their majority interest to Canadian based Onex Corporation
(7th in total deals).
- Digital Insurance completed
two deals in November bringing their annual total to eight
deals. They were acquired by Fidelity National Financial, the
nation’s largest title insurance company (8th in total
Rounding out the top ten are CBIZ and NFP with eight and six
With such a frenetic finish in 2012 and changes in tax
implications for sellers, we will likely see some slow down
from December’s numbers. However, the deal multiples do
not appear to be going down and agency owners are still viewing
an external perpetuation as a viable succession plan. When the
champagne bottles dry up, we expect to see deal activity
restart in 2013 with a steady pace.
offered through MarshBerry Capital, Inc., Member FINRA and
Disclosure: All deal count metrics
are inclusive of completed deals with U.S. targets only.
Scorecard year-to-date totals may change from month to month
should an acquirer notify MarshBerry or the public of a prior
acquisition. Please feel free to send any announcements
to M&A@MarshBerry.com .
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