The Insurance Agency Mergers and Acquisitions Insider
This blog was designed for topical discussions relating to insurance agency mergers and acquisitions, and some best practices for managing an insurance brokerage business. We are a merger & acquisition advisory firm exclusively serving independent insurance agencies and brokerages. We are actively involved in valuations and M&A transactions across the United States for agencies with a few hundred thousand to over $10M in revenue, and we have chosen to openly share insider information for the benefit of the brokerage community.
Tax Implications of the 2020 Elections on Agency Sales
The 2020 election is behind us and a new president is about to take the helm in what has been one of the most tumultuous times in modern American history. With the Georgia run-off elections decided, the Democratic Party has control over both the Executive and Legislative branches of government. [...]
Stop Negotiating with Buyers on Your Own
The market is flush with buyers and we are well aware that they are pounding on agency owner’s doors on a daily basis. Read this article to learn the #1 step to take to sell your insurance agency for the highest price.
How to get the highest sale price for your agency
The market is flush with buyers and we are well aware that they are pounding on agency owner’s doors on a daily basis. Read this article to learn the #1 step to take to sell your insurance agency for the highest price.
Will your agency be worth more before or after the pandemic?
As one of the nation’s leading agency valuation firms, we’re fielding many calls these days from agency principals, buyers and lenders about what impact the pandemic will have on agency values.
What kind of agency owner are you?
I have had the fortune of interacting with hundreds of business owners over the years. Going even back as far as my college days when I bar tended at a yacht club, I’ve always tried to take note of successful people and dissect what it is about them that drives [...]
What is an agency worth?
This question is one of the main reasons people call our office. In fact, we complete over 120 valuations of insurance agencies and brokerages each year for agency owners, buyers and lenders all asking for our professional opinion on agency market value. We are the most experienced firm in the nation when it comes to valuing agencies with under $5M in revenue, which is why the leading lenders in the insurance industry turn to us.
How to Know When it’s Time to Sell Your Agency
Selling a business is a major decision. On occasion the decision to sell is driven by one factor, such as the principal facing a health concern. For most agency owners though, the decision is based on a number of factors. In our experience of working with hundreds of agency owners [...]
Six Mistakes to Avoid When Selling Your Insurance Agency
Since you will only sell your agency one time, its vitally important that you get it right the first time. So here are six mistakes to avoid when selling your insurance agency:
Projecting Cash Flow from an Agency Acquisition
In my post from October, I discussed debt coverage ratios and EBITDA multiples. Now let’s talk about projecting cash flow. I’m shocked how many buyers make offers without figuring out what the cash flow will be with financing. I’m not alone either. I’ve spoken with many loan officers that deal with the same issue. This article is long overdue.
Steps to Improve Confidentiality During the Sale of Your Agency
When it comes time to selling your agency, confidentiality is vitally important. You may be dealing with one or more buyers, each of whom will have a multitude of questions and requests and his/her own opinion of how to go about the process of acquiring your agency. The potential of [...]
Financing Agency Acquisitions – Understanding Debt Coverage
Different lenders underwrite acquisition financing a little differently; however, they all typically want to stay under 6 x EBITDA on leverage. The reasoning is fairly simple…cash flow. As we’ll see below, agencies don’t cash flow well when they leverage themselves over about 6 x EBITDA. One of lenders’ key underwriting metrics is something called the debt coverage ratio, which is a measure of the cash flow cushion over debt payments.
National Preparedness Month: Selling Opportunities
National Preparedness Month is about taking the necessary steps to prepare for natural disasters or the unforeseen emergency. When it comes to preparing for the unexpected – the first step is to check your insurance coverage. Without the proper coverage your ability to take care of family and business is [...]
Navigating the Commercial Loan Process
If you think a loan is just a loan – stop. The purpose of a commercial loan is to generate revenue, make improvements (equipment) or commence new construction development. Generally, these loans have short durations, some have balloon payments and pre-penalty fees when it comes to paying off the loan [...]
History of Insurance: Why It Matters When You’re Considering an Acquisition
It's difficult to imagine a time when insurance wasn't an integral part of managing risk for both individuals and businesses alike. But insurance has evolved over the millennia from something we would barely recognize to the products of today. To understand the current insurance industry and all of its potential, [...]
All About Agency Due Diligence
Agency due diligence means that you've taken the necessary steps to understand what you're acquiring in an agency acquisition. Any time you purchase an existing business, you're not only acquiring the good: Goodwill Lines of Business Revenues Talent Technology You're also acquiring liabilities and obligations like: Debts/Overhead Retirement packages Outdated [...]
When Not to Buy an Insurance Agency
So, you're thinking about the possibilities of owning an insurance agency. Before you make the final decision gather as much information on the prospective purchase and leave nothing to chance. Take advantage of due diligence and hire a professional - it’s a lawful discovery process for collecting information about a [...]