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M&A Services Newsletter – Q2 2023

M&A Services Newsletter – Q2 2023
M&A Services, Inc. Newsletter – Q2 2023

Letter from the CEO

As we celebrate M&A Services’ 25th year in business, we continue striving to provide our new and existing clients with sound advice to navigate the current business environment characterized by high interest rates, rising capital costs, inflation and economic uncertainty, among other challenges.

In the Insurance sector, M&A activity remains strong. Consolidation of Insurance Companies is still a trend, as is the growing interest of non-insurance-related investors and Private Equity groups focused on the Insurance Industry, especially on the distribution side. And that is where our Firm’s experience and knowledge can most effectively help Insurance Companies, Agencies, and MGAs/MGUs to maximize value through growth acquisitions, partnerships, or divestiture opportunities, even during these turbulent times.

As an example, M&A Services recently advised The Wooditch Company on the sale to Hub International Limited. The Wooditch Company is a privately held commercial insurance, risk management and employee benefits services firm advising clients in various industries, including construction. Their specialization in the construction industry supports Hub’s Specialty practice by complementing and strengthening its existing capabilities. The Wooditch Company team will join Hub Los Angeles/Orange County. Hub provides an ideal platform for The Wooditch Company to continue to grow, offering strong capabilities and resources in all key areas, including specialty industries, claims, technology and more, to perfectly meet the needs of The Wooditch Company’s clients.

With our staff of professionals with more than 100 years of combined experience in insurance, reinsurance, and investment banking, M&A Services is equipped to stay agile and ahead of the curve, to efficiently mitigate transaction execution risk, to better understand clients’ needs and develop specialized processes that effectively meet those demands. This proactive and customer-centric approach has enabled our Firm to differentiate itself from competitors, and to serve as a trusted advisor that can address all financial aspects of the insurance industry, offering incomparable concierge service.

Merger & Acquisition Services has a long track record of closed transactions, and has won numerous industry awards, including placement as the “Top Advisor in Insurance Underwriting” as determined by S&P Global Market Intelligence for 12 out of the past 18 years.

We also strive to foster long term relationships with our current and prospective clients. And so, we invite you to schedule a time to connect with one of our senior advisors during any upcoming industry events this fall where we will be at hand for face-to-face meetings, or at any other time that may be convenient. Please reach out to Vanessa Silva at vsilva@maservices.com to coordinate a meeting with one of our advisors. All inquiries are kept strictly confidential.

Our business philosophy since the firm’s inception has been to provide unbiased, focused, and value-added advice to our clients. We look forward to continuing to deliver on that promise every day.

Sincerely,

Jason C. Murgio

CEO

 

                                                    Recently Closed/Announced Transactions

 

See all closed transactions here.

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.

  • San Diego, CA – September 17-20 – for WSIA Annual Convention
  • National Harbor, MD – September 17-20 – during NAMIC Annual Convention
  • Colorado Springs, CO – September 29 – October 3 – during CIAB Leadership Forum
  • Scottsdale, AZ – October 16-18 – for 23rd Annual Target Markets Summit
  • Las Vegas, NV – October 31- November 2 – for InsureTech Connect 2023
  • Boston, MA – November 5-7 – during PCI Annual Meeting
  • Grand Cayman – November 28-30 – during Cayman Captive Forum 2023
  • Las Vegas, NV – December 4-6 – during PLUS Conference

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

Additionally, our team is available for virtual meetings and conference calls to address any questions you may have regarding new strategies that are available to carry on with your corporate development goals.

All inquiries are kept strictly confidential.

See all upcoming events here.

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 P&C Opportunities:

  • 40 state P&C Shell
  • Regionally licensed P&C Shell with licenses in CA, ID, IL, NY, OR, PA, WA.
  • P&C Shell with active licenses in AK, AZ, DC, DE, GA, IA, IN LA, MI, MO, MS, MT, NE, NH, NM, OH, OK, TN, TX, VT, WV and pending applications in AL, AR, CO, CT, FL, HI, IL, KS, KY, MA, MD, MN, ND, NJ, NV, OR, PA, RI, SD, UT, VA, WY.
  • NY only P&C Shell.

Current E&S Opportunities:

  • Clean E&S shell with authorizations in 40+ states

Current L&H Opportunities:

  • Wanted – Client seeking widely licensed life, annuity or health company.
  • Single state L&H New York Shell.

Please contact Paul Procops at pprocops@maservices.com  to learn more about the process and the opportunities above.

Learn more about our Shell Transactions

Active Project – Head Start

M&A has been engaged to sell a shell insurance agency. The company has never written any business. The company is licensed in the following 39 states: AK, AR, AZ, CA, CO, CT, DC, DE, FL, HI, IA, IL, IN, KS, LA, MD, ME, MO, NC, ND, NE, NH, NJ, NM, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY. All licenses are in good standing.

For more information on this project please contact Paul Procops or Trevor Murgio

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.

For more information on this project please contact Jason Murgio or Paul Procops.

Distribution

2022 was a banner year for Insurance Distribution M&A activity with valuations reaching all-time highs in early to mid-2022. During the last twelve months, the Federal Reserve has raised the fed funds rate from near 0% to targeting 5.0% – 5.25% as of July 2023. Banks quickly followed suit resulting in residential and commercial debt currently in the 7% – 10% range.

The quick rise in commercial interest rates on private equity backed insurance aggregators resulted in the market digesting these higher interest rates and caused some groups to prioritize cash usage in M&A transactions.

Now, well into 2023, the insurance distribution marketplace has largely accepted the higher interest rate environment and we are not seeing a corresponding effect on valuations. We expect the remainder of 2023 to continue be a robust year for insurance distribution valuations and deal structures, with quality, at-scale firms commanding high multiples.

For more information on Distribution and on how we can help you achieving your corporate strategic goals please contact Chris Hughes directly at chughes@maservices.com

Learn more about Distribution services

Agency Financing

With the Federal Reserve expected to implement two additional interest rate hikes before the end of 2023, it is now more important than ever to secure a lower interest rate for your agency’s financing needs. At Merger & Acquisition Capital Services, we specialize in providing personalized financing solutions for agencies of all sizes through our licensed broker-dealer.

Our team of skilled dealmakers at M&A Services is dedicated to assisting clients throughout the entire process of capital financing. We excel in identifying suitable lenders, creating comprehensive offering memorandums, and crafting persuasive presentations for potential lenders and equity partners.

Leveraging our extensive industry knowledge and expertise, we can simultaneously approach a diverse array of capital providers, significantly streamlining the funding process. By assisting with managing the capital raising process, we empower agency owners to focus on their day-to-day operations, rather than managing the complexities of raising capital.

Merger & Acquisition Capital Services possesses the capability to develop tailor-made solutions that precisely align with your agency’s unique requirements. Whether you are seeking capital for an acquisition, a partner buy-out/buy-in, or refinancing existing agency debt, we are equipped to cater to your specific needs.

Please contact Trevor Murgio directly at tmurgio@maservices.com . All inquiries will be held strictly confidential.

Learn more about Agency Financing

MGA Book Roll

M&A Services’ Book Roll offers a unique opportunity for Program Managers and MGAs 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 over 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 Daniel Baransky directly at dbaransky@maservices.com. All inquiries are kept confidential and you incur no obligation to M&A Services.

Program Insurance

We continue to see private equity strong at work in the marketplace. Whether it is the continued development of acquisitions on the distribution side or the development of program capacity through the creation of new carriers, private equity is hard at work. The creation of these carriers should theoretically add more capacity for both new programs or the movement of programs to a more ‘user friendly’ environment. Often these new carriers will combine both the new capacity and the ability to acquire the distribution as part of the process.

Now that face to face meetings at conferences are happening mostly in the way they used to before the pandemic, we look forward to getting back to the good old handshake meetings and sitting across the table and discussing program opportunities.

For more information on Programs or to schedule an appointment with our advisors please contact us at info@maservices.com.

Learn more about Program Business services

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 25 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
  • Fronting
  • Reinsurance

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.

Copyright 2023 Merger & Acquisition Services, Inc. & Merger & Acquisition Capital Services, LLC. All Rights Reserved

M&A Services Newsletter – Q2 2023
  • Jul 13, 2023
M&A Services, Inc. Newsletter – Q2 2023

Letter from the CEO

As we celebrate M&A Services’ 25th year in business, we continue striving to provide our new and existing clients with sound advice to navigate the current business environment characterized by high interest rates, rising capital costs, inflation and economic uncertainty, among other challenges.

In the Insurance sector, M&A activity remains strong. Consolidation of Insurance Companies is still a trend, as is the growing interest of non-insurance-related investors and Private Equity groups focused on the Insurance Industry, especially on the distribution side. And that is where our Firm’s experience and knowledge can most effectively help Insurance Companies, Agencies, and MGAs/MGUs to maximize value through growth acquisitions, partnerships, or divestiture opportunities, even during these turbulent times.

As an example, M&A Services recently advised The Wooditch Company on the sale to Hub International Limited. The Wooditch Company is a privately held commercial insurance, risk management and employee benefits services firm advising clients in various industries, including construction. Their specialization in the construction industry supports Hub’s Specialty practice by complementing and strengthening its existing capabilities. The Wooditch Company team will join Hub Los Angeles/Orange County. Hub provides an ideal platform for The Wooditch Company to continue to grow, offering strong capabilities and resources in all key areas, including specialty industries, claims, technology and more, to perfectly meet the needs of The Wooditch Company’s clients.

With our staff of professionals with more than 100 years of combined experience in insurance, reinsurance, and investment banking, M&A Services is equipped to stay agile and ahead of the curve, to efficiently mitigate transaction execution risk, to better understand clients’ needs and develop specialized processes that effectively meet those demands. This proactive and customer-centric approach has enabled our Firm to differentiate itself from competitors, and to serve as a trusted advisor that can address all financial aspects of the insurance industry, offering incomparable concierge service.

Merger & Acquisition Services has a long track record of closed transactions, and has won numerous industry awards, including placement as the “Top Advisor in Insurance Underwriting” as determined by S&P Global Market Intelligence for 12 out of the past 18 years.

We also strive to foster long term relationships with our current and prospective clients. And so, we invite you to schedule a time to connect with one of our senior advisors during any upcoming industry events this fall where we will be at hand for face-to-face meetings, or at any other time that may be convenient. Please reach out to Vanessa Silva at vsilva@maservices.com to coordinate a meeting with one of our advisors. All inquiries are kept strictly confidential.

Our business philosophy since the firm’s inception has been to provide unbiased, focused, and value-added advice to our clients. We look forward to continuing to deliver on that promise every day.

Sincerely,

Jason C. Murgio

CEO

 

                                                    Recently Closed/Announced Transactions

 

See all closed transactions here.

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.

  • San Diego, CA – September 17-20 – for WSIA Annual Convention
  • National Harbor, MD – September 17-20 – during NAMIC Annual Convention
  • Colorado Springs, CO – September 29 – October 3 – during CIAB Leadership Forum
  • Scottsdale, AZ – October 16-18 – for 23rd Annual Target Markets Summit
  • Las Vegas, NV – October 31- November 2 – for InsureTech Connect 2023
  • Boston, MA – November 5-7 – during PCI Annual Meeting
  • Grand Cayman – November 28-30 – during Cayman Captive Forum 2023
  • Las Vegas, NV – December 4-6 – during PLUS Conference

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

Additionally, our team is available for virtual meetings and conference calls to address any questions you may have regarding new strategies that are available to carry on with your corporate development goals.

All inquiries are kept strictly confidential.

See all upcoming events here.

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 P&C Opportunities:

  • 40 state P&C Shell
  • Regionally licensed P&C Shell with licenses in CA, ID, IL, NY, OR, PA, WA.
  • P&C Shell with active licenses in AK, AZ, DC, DE, GA, IA, IN LA, MI, MO, MS, MT, NE, NH, NM, OH, OK, TN, TX, VT, WV and pending applications in AL, AR, CO, CT, FL, HI, IL, KS, KY, MA, MD, MN, ND, NJ, NV, OR, PA, RI, SD, UT, VA, WY.
  • NY only P&C Shell.

Current E&S Opportunities:

  • Clean E&S shell with authorizations in 40+ states

Current L&H Opportunities:

  • Wanted – Client seeking widely licensed life, annuity or health company.
  • Single state L&H New York Shell.

Please contact Paul Procops at pprocops@maservices.com  to learn more about the process and the opportunities above.

Learn more about our Shell Transactions

Active Project – Head Start

M&A has been engaged to sell a shell insurance agency. The company has never written any business. The company is licensed in the following 39 states: AK, AR, AZ, CA, CO, CT, DC, DE, FL, HI, IA, IL, IN, KS, LA, MD, ME, MO, NC, ND, NE, NH, NJ, NM, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY. All licenses are in good standing.

For more information on this project please contact Paul Procops or Trevor Murgio

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.

For more information on this project please contact Jason Murgio or Paul Procops.

Distribution

2022 was a banner year for Insurance Distribution M&A activity with valuations reaching all-time highs in early to mid-2022. During the last twelve months, the Federal Reserve has raised the fed funds rate from near 0% to targeting 5.0% – 5.25% as of July 2023. Banks quickly followed suit resulting in residential and commercial debt currently in the 7% – 10% range.

The quick rise in commercial interest rates on private equity backed insurance aggregators resulted in the market digesting these higher interest rates and caused some groups to prioritize cash usage in M&A transactions.

Now, well into 2023, the insurance distribution marketplace has largely accepted the higher interest rate environment and we are not seeing a corresponding effect on valuations. We expect the remainder of 2023 to continue be a robust year for insurance distribution valuations and deal structures, with quality, at-scale firms commanding high multiples.

For more information on Distribution and on how we can help you achieving your corporate strategic goals please contact Chris Hughes directly at chughes@maservices.com

Learn more about Distribution services

Agency Financing

With the Federal Reserve expected to implement two additional interest rate hikes before the end of 2023, it is now more important than ever to secure a lower interest rate for your agency’s financing needs. At Merger & Acquisition Capital Services, we specialize in providing personalized financing solutions for agencies of all sizes through our licensed broker-dealer.

Our team of skilled dealmakers at M&A Services is dedicated to assisting clients throughout the entire process of capital financing. We excel in identifying suitable lenders, creating comprehensive offering memorandums, and crafting persuasive presentations for potential lenders and equity partners.

Leveraging our extensive industry knowledge and expertise, we can simultaneously approach a diverse array of capital providers, significantly streamlining the funding process. By assisting with managing the capital raising process, we empower agency owners to focus on their day-to-day operations, rather than managing the complexities of raising capital.

Merger & Acquisition Capital Services possesses the capability to develop tailor-made solutions that precisely align with your agency’s unique requirements. Whether you are seeking capital for an acquisition, a partner buy-out/buy-in, or refinancing existing agency debt, we are equipped to cater to your specific needs.

Please contact Trevor Murgio directly at tmurgio@maservices.com . All inquiries will be held strictly confidential.

Learn more about Agency Financing

MGA Book Roll

M&A Services’ Book Roll offers a unique opportunity for Program Managers and MGAs 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 over 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 Daniel Baransky directly at dbaransky@maservices.com. All inquiries are kept confidential and you incur no obligation to M&A Services.

Program Insurance

We continue to see private equity strong at work in the marketplace. Whether it is the continued development of acquisitions on the distribution side or the development of program capacity through the creation of new carriers, private equity is hard at work. The creation of these carriers should theoretically add more capacity for both new programs or the movement of programs to a more ‘user friendly’ environment. Often these new carriers will combine both the new capacity and the ability to acquire the distribution as part of the process.

Now that face to face meetings at conferences are happening mostly in the way they used to before the pandemic, we look forward to getting back to the good old handshake meetings and sitting across the table and discussing program opportunities.

For more information on Programs or to schedule an appointment with our advisors please contact us at info@maservices.com.

Learn more about Program Business services

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 25 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
  • Fronting
  • Reinsurance

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.

Copyright 2023 Merger & Acquisition Services, Inc. & Merger & Acquisition Capital Services, LLC. All Rights Reserved

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