Today’s insurance industry is highly fragmented, with more than 400,000 agencies and brokerages nationwide. Most agencies have fewer than five employees, and the average age of agency owner is 59 years old. With thousands of agency owners nearing retirement, experts estimate that 75% of the current insurance agencies in the U.S. will have a transition ownership event over the next 7-10 years. These events can take many forms, including family perpetuation, partner buy-outs, mergers, book purchases and an actual sale.
If you are looking to buy or sell an agency, you may have already discovered the unique challenges that this type of transaction poses. Because independent agencies typically have few hard assets to borrow against, the market is ignored by banks and national insurance M&A firms. In contrast, Springtree Group supports insurance entrepreneurs whose firms have commission and fee levels under $10M annually, with a specific sweet spot from $5M down to $300K. We are uniquely qualified to broker M&A transactions in the independent insurance agency space.
Springtree Group satisfies the three primary concerns for both buyers and sellers in this market:
- Secure confidentiality. Agency and brokerage sellers want to keep the sale highly confidential so as not to concern employees, clients, their insurance markets, and particularly the competition. Only 10% of these transactions are made public.
- Financial viability. Sellers cannot afford for unqualified buyers to waste their time working on a deal only to find out that the buyer cannot provide financing to complete the transaction. We ensure that the buyer is not only financially qualified but is backed by an organization that will provide the financing and deal mechanics.
- Precision. Using a customized targeted approach, we help you focus specifically only on those targets that will fit the specifications and structure an M&A process specific to this industry. You can focus very specifically on only those targets that will fit your needs with the geographic parameters you require, saving time and money for all concerned.
We view acquisition target development as a multi-level and joint endeavor, using the national approach that STG provides in concert with the “boots on the ground” local market intelligence that only the client has access to. STG provides unique buyer services, such as the monthly Seller Notification Services provided to our buyers offer a North American sampling of agencies available for sale. We offer a well-articulated step by step approached for our clients to find, negotiate, analyze, fund and close insurance agency transaction. Of course the critical piece is the employment of our multiple loan platforms and financial packages that bring the deal together.
No other company in the U.S. provides a complete program of acquisition process development, surrounded by a full suite of financing tools in this very specific and hard to finance insurance agent and brokerage space. We would enjoy the opportunity to help you if that is your profile. Please give us a call at (972) 395-8811 today.