Name: M & A Services
Price range: CI$

Letter from the CEO

We hope this email finds you well, and that the third quarter has been a successful one for your business. After seeing a slightly less active fourth quarter in 2016, the M&A Market conditions for insurance distribution companies have seemingly rebounded in the first two quarters of 2017. During the first half of 2016 there were 230 announced deals, with a total transaction value of $2.9 billion. The first half of 2017 has already seen more than 310 announced deals with a total transaction value of more than $10 billion, representing a threefold increase from the same period of 2016. Private equity backed firms remain the largest acquirers accounting for almost 50% of all announced deals, including the acquisition of USI by private equity firms KKR and Canadian pension fund CDPQ for $4.3 billion from the Canadian private equity firm Onex. Carrier shell activity has been also extremely active, both in the L&H and P&C sectors. In 2016 M&A closed 7 shell transactions and for 2017 the firm has closed and pending 8 shell transactions. The market demand continues for both L&H and P&C shells with several parties still seeking admitted license platforms. We have not seen this level of shell activity since 2005/2006. We look forward to keep serving your needs through our services that include M&A transactions, capital financing, fronting, renewal rights, reinsurance, strategic advisory, and program placements. We know the insurance industry and our advisors make each client’s project a priority, offering unparalleled concierge-level service. 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.

Sincerely,

Jason C. Murgio
CEO

Upcoming Industry Events
Throughout the year Merger & Acquisition 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.

BALTIMORE, MD – October 8 – 11, 2017 for CHART convention.
CHICAGO, IL – October 15 – 17, 2017 during PCI Annual Meeting.
SCOTTSDALE, AZ – October 16 – 18, 2017 for Annual Target Markets Summit.
ATLANTA, GA – November 1 – 3, 2017 during PLUS Annual International Conference.
GRAND CAYMAN – November 28 – 30, 2017 for IMAC – Cayman Captive Forum.

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.

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.

Oct 23, 2017

Letter from the CEO

Sincerely,

Jason C. Murgio
CEO

BALTIMORE, MD – October 8 – 11, 2017 for CHART convention.
CHICAGO, IL – October 15 – 17, 2017 during PCI Annual Meeting.
SCOTTSDALE, AZ – October 16 – 18, 2017 for Annual Target Markets Summit.
ATLANTA, GA – November 1 – 3, 2017 during PLUS Annual International Conference.
GRAND CAYMAN – November 28 – 30, 2017 for IMAC – Cayman Captive Forum.

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

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.

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.

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.

Data Room Terms
Electronic Data Room Site Access Terms & Conditions
Introduction
Merger & Acquisition Services, Inc., and its affiliates (collectively herein “M&A”) licenses and operates Electronic Data Room, a proprietary electronic commerce or internet site through which various information services may be offered. Principal (“Principal(s)”) establish data room pages on M&A’s Electronic Data Room system, (“Data Rooms”) through which their company transactions (“Company”) may be completed. User desires to have access to the Electronic Data Room, and M&A desires to offer to User access to the Electronic Data Room, all on the terms and subject to the conditions provided herein.
1. License.
M&A grants to User a limited, personal, non-transferable, non-exclusive revocable license to access and use the Electronic Data Room, including those Data Rooms as determined by the M&A, upon the terms and subject to the conditions set forth herein. Any Data Room deemed restricted by a M&A may only be accessed by those Users to whom a data room key has been assigned for that specific Data Room. Attempts to access restricted Data Rooms for which a User does not possess a data room key is strictly forbidden and is a violation of these terms. M&A may suspend User’s license at any time in its sole discretion.
2. Consent.
User consents to M&A’s collection and reporting of all actions taken within the Data Room to Principal(s).
3. User Obligations; Certain Operating Procedures.
1. Computer Equipment. User will furnish any computer equipment necessary for User to access the internet and use the Electronic Data Room. User will provide its own communication line(s), Internet Service Provider, and any other equipment and technology necessary in order for it to access and use the Electronic Data Room.
2. Access. User represents and warrants that User’s use of the Electronic Data Room will not violate any law, regulation, or statute. User will not access and will not attempt to access any restricted Data Room for which it has not been assigned a data room key without the consent of M&A. User will comply with the terms established by both the confidentiality agreement or non disclosure agreement executed between User and Principal(s) and with M&A’s terms and conditions outlined herein for any Data Room to which the User is granted access.
3. ID and Password. In order to obtain access to the Electronic Data Room, User must register with M&A and M&A will assign an online profile, including selection of an ID and a temporary password. User represents and warrants that all information provided by User to gain access to the Electronic Data Room services is and will be complete and accurate. To access Data Rooms, User will be given a login profile with the data room key that has been assigned to User for that restricted Data Room. Hereinafter, ID’s, passwords, and data room keys are referred to collectively as “Authentication Information.”
4. User will take such actions as are necessary in order for it to maintain the confidentiality of, and prevent the unauthorized use of, User’s Authentication Information. User will notify M&A immediately in writing if User determines, or has reason to believe, that an unauthorized party has gained access to any Authentication Information. (ii) As a condition for gaining access to the Electronic Data Room, User authorizes M&A to rely upon any information and/or instructions set forth in any data transmission using the Authentication Information, without making further investigation or inquiry, and regardless of the actual identity of the individual transmitting the same, in connection with the operation of the Electronic Data Room. Use of the Authentication Information, whether or not authorized by User, shall be solely the responsibility of and at the risk of User. USER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS M&A AND ITS AFFILIATES FROM ANY CLAIM, PROCEEDING, OR DAMAGES BASED UPON ANY USE, MISUSE, OR UNAUTHORIZED USE OF USER’S AUTHENTICATION INFORMATION.
4.Confidentiality and Related Obligations.
1. The information contained in each Data Room, is confidential and may be proprietary or legally privileged information of the Principal, and is covered under the terms of the non disclosure and/or confidentiality agreement executed by the registered user with the respective Principal(s). The information in the data room is intended solely for the use of the registered user. Copying or retransmission of any information contained herein by any other person is unauthorized. User must not, directly or indirectly, use, disclose, distribute, print, or copy any material if you are not the intended user.
5. Security
1. Our Website only uses cookies (and other means of security) to identify Users and User’s interests as disclosed by User, and to track usage of the Electronic Data Room and online web form.
2. M&A has implemented reasonable operational security in order to maintain information from loss, misuse, alteration or destruction. Only authorized M&A personnel and contractors are provided access to information, and these employees and contractors are required to treat this information as confidential. Despite these precautions, M&A. cannot guarantee that unauthorized persons will not obtain access to User information.
6. Information Disclaimer; Limitation of Liability.
1. Disclaimer Regarding the Electronic Data Room. User acknowledges that software programming is inherently complex. User accepts the risk that the operating system, software, and documents included in the Electronic Data Room, from time to time may contain inaccuracies and may be adversely affected by computer viruses, unknown programming difficulties resulting in incorrect information or system malfunctions or shut-downs. However, M&A will use reasonable commercial efforts to correct any inaccuracies expressly made known to it and to correct and/or remove (as appropriate) any computer viruses and other system malfunctions and shut-downs that are within its control. In addition, user acknowledges that there are risks inherent in Internet connectivity that could result in the loss of User’s privacy and confidential information. M&A DOES NOT WARRANT OR REPRESENT THAT THE Electronic Data Room SERVICE WILL BE UNINTERRUPTED, ERROR-FREE, OR 100% SECURE. TO THE EXTENT PERMITTED BY APPLICABLE LAW, M&A DISCLAIMS ANY AND ALL WARRANTIES NOT EXPRESSLY STATED IN HEREIN INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. USER IS SOLELY RESPONSIBLE FOR THE SUITABILITY OF THE SERVICES CHOOSEN. ALL SERVICES ARE PROVIDED ON AN “AS IS” BASIS.
2. The Information contained in each Data Room is indicative only, subject to change and does not constitute an offer to purchase or sell securities and simply sets out information to allow Users to consider and evaluate the merits of a proposed transaction with the Principal(s). The Electronic Data Room is not an offer of any financial or other products, goods or services other than the data room service.
3. M&A is the creator of each Data Room, however, M&A does not monitor or screen the content placed by Principal(s) in the Electronic Data Room. User’s use of content in the Electronic Data Room is at User’s sole risk, and M&A disclaims responsibility for any such content. Neither M&A nor its advisers have independently verified any of the information contained in the Data Room, including any forecast or projected information and any assumptions upon which those statements are based. Neither M&A nor its advisors: (i) makes (and will not make) any representation or warranty (express or implied) regarding; or (ii) accepts (and will not accept) any responsibility or liability (including negligence) for, the truth, accuracy or completeness of any statement, opinion, forecast, information or other matter (whether expressed or implied) in any Data Room.
4. Neither M&A nor its advisors, has (and will not have) any responsibility or liability (including in negligence): for, or in connection with, (i) any act or omission directly or indirectly in reliance upon; or (ii) for any expense, loss or other liability directly or indirectly arising from, or in connection with, any omission from or defects in, or any failure to correct any information in this Data Room or any other communication (written or oral) provided by the Principal(s) about or concerning the Company, and/or the issue of shares in the Company.
5. This Data Room includes certain statements with respect to the Principal(s) future operations and performance of the Company. Such statements reflect various assumptions made by the Principal(s) of the Company concerning, or which are relevant to, the anticipated operations of the Company. Those assumptions and/or anticipated operations of the Company are and will be subject to uncertainties and contingencies many, if not all, of which are outside the control of the M&A. Therefore, those assumptions and/or anticipated returns may or may not prove to be correct or valid. While the statements and estimates made by the Principal(s) and contained in this Data Room genuinely represent the views of the Principal(s), they involve subjective judgment and analysis which may or may not be correct. No representations or warranties are (or will be made), and no responsibility or liability (including in negligence) is (or will be) accepted by the M&A or its advisors as to the truth, accuracy or completeness of such statements, assumptions or estimations or projections (and no such representations or warranties should be inferred).
IN NO EVENT SHALL M&A OR ITS OFFICERS, DIRECTORS, OWNERS, EMPLOYEES, ADVISORS, AGENTS OR AFFILIATES BE LIABLE DIRECTLY OR INDIRECTLY TO USER OR ANY PARTY CLAIMING THROUGH IT FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS AND DAMAGES THAT COULD HAVE BEEN AVOIDED BY THE USE OF REASONABLE DILIGENCE, , ARISING OUT OF THE USE OF THE Electronic Data Room, AND REGARDLESS OF THE NATURE OR CAUSE OF SUCH DAMAGES EVEN IF M&A HAS BEEN ADVISED OR SHOULD BE AWARE OF THE POSSIBILIY OF SUCH DAMAGES.

7. Termination.
1. At its sole election at any time, M&A may temporarily or permanently suspend the rights of User to access the Electronic Data Room or any part thereof.
8. Other.
1. For questions or concerns about the terms & conditions set forth herein, please contact M&A’s Headquarters at our New Office Address as posted on the M&A Website.
2. Acceptance and Changes. User accepts the terms outlined herein by clicking below. If User does not click below, it may not use the Electronic Data Room service. M&A reserves the right to amend these terms at any time. The continued use of the Electronic Data Room by User constitutes acceptance of such changes or amendments.
3. Electronic Signature. By logging into the Electronic Data Room, User intends to, and does agree to comply with terms & conditions outlined herein.

M&A Services Newsletter – Q3 2017

Letter from the CEO

Letter from the CEO

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