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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Private Equity Continues Interest in Insurance Industry

Private equity leaders wrapped up 2023 with several M&A headlines involving insures rather than insurance service businesses which has dominated the news in recent years. The $200 million investment commitment in GuideOne as the inaugural member of Bain Capital’s The Mutual Group provides Bain with a scalable operating platform to support long-term success and the ability to revolutionize services to the mutual insurance industry. KKR & Co. also started 2024 closing on its $2.7 billion acquisition of Global Atlantic Financial Group raising their partial ownership interest to 100% in the life and retirement insurer. 1

Fed Keeps Rates Steady for Third Consecutive Meeting

The Federal Reserve (Fed) announced that it intends to hold off on any monetary policy changes for now and signaled that three rate cuts were expected in 2024. The Fed’s median projections show the funds rate falling to 4.6% by the end of 2024 and to 3.6% the following year. The continued positive outlook from the Fed is building momentum in the market and increasing investor optimism.2

Financial Institutions Returning to M&A

Financial institutions are showing a strong inclination towards returning to mergers and acquisitions. The survey reveals that 90% of financial services CEOs plan to engage in M&A activities in the upcoming year, with 72% intending to increase their investments in acquisitions. Additionally, private equity firms with substantial capital are becoming more active in the financial institutions M&A landscape. These firms, previously cautious, are now looking at a more significant number of deals.3

Private Equity Adapts to Changing Market Conditions

Private equity funds have exhibited resilience amidst challenges by adapting to market conditions, primarily by keeping deal sizes small and exploring alternative sources of capital for financing transactions. This adaptability has significantly impacted the insurance brokerage sector, with a predicted surge in insurance due diligence as deal teams aim to boost EBITDA efficiencies and manage risks associated with their investment assets.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Validus Holdings/Validus Specialty
  • RenaissanceRe Holdings Ltd. 
  • $2,998.00
  • Banc of California, Inc.
  • Banc of California, Inc. 
  • $1,047.00
  • AmWINS Group, Inc.
  • Genstar Capital, LLC; Dragoneer Investment Group, LLC; SkyKnight Capital, L.P.
  • $1,000.00
  • Galloway-Chandler-McKinney Insurance Agency, Inc.
  • Arthur J. Gallagher & Co. 
  • $904.00
  • Eastern Insurance Group, LLC
  • Arthur J. Gallagher Risk Management Services, Inc.
  • $511.00
  • North Carolina insurance companies of Greg Lindberg
  • Universal Financial Holdings, LLC
  • $307.00
  • Partners Bancorp
  • LINKBANCORP, Inc. 
  • $162.00
  • Acceptance Insurance Agency Of Tennessee, Inc.
  • Alliant Insurance Services, Inc.
  • $120.00
  • Midwest Holding Inc.
  • Antarctica Capital, LLC
  • $105.00
  • Peak Bancorp, Inc.
  • BAWAG Group AG 
  • $64.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Alex N. Sill Company, LLC
  • CNL Strategic Capital Management, LLC
  • $58.50
  • Power Funding, Ltd.
  • Fourshore Partners
  • n/a
  • AssuriCare LLC
  • Teleo Capital Management LLC
  • n/a
  • Lombard International US Holdings, Inc.
  • BroadRiver Asset Management, L.P.
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Muncy Bank Financial, Inc.
  • Muncy Columbia Financial Corporation
  • n/a
  • ISU Insurance Agency Network
  • Steadfast Group Limited 
  • n/a
  • Cincinnati Bancorp, Inc.
  • LCNB Corp. 
  • n/a
  • Insurance Operations of The Evans Agency, LLC
  • Arthur J. Gallagher & Co. 
  • n/a
  • Substantially all of the assets of Exchange Underwriters, Inc.
  • World Insurance Associates LLC
  • n/a
  • Stack Insurance Agency, Inc.
  • Hyland Insurance
  • n/a
  • TW Group, Inc.
  • World Insurance Associates LLC
  • n/a
  • Trusted Resource Underwriters Exchange
  • American Family Insurance Group; Gallatin Point Capital LLC
  • n/a
  • Candy Insurance Agency
  • Crest Insurance Group, LLC
  • n/a
  • LPL Insurance Agency, Inc.
  • Inszone Insurance Services, Inc.
  • n/a

 

Source S&P Capital IQ as of 1/18/2024 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Poole

Orlando Office

407-621-2111 |

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Kyle Wishing

Atlanta Office

404-994-4186 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Mukhopadhyay, A. “Bain Capital Insurance Invests $200m to Launch The Mutual Group.” Reinsurance News, December 21, 2023.
  2. 2. Conway, L. “December 2023 Fed meeting: Rates stay put.” J.P. Morgan, December 14, 2023.
  3. 3. Khosla, S. “The Navigator: perspectives on financial services M&A.” Ernst and Young, November 2023.
  4. 4. Mukhopadhyay, A. “Woodruff Sawyer forecasts increased deal flow and evolving structures for Q4’23 and 2024.” Reinsurance News, October 20, 2023.

 

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