Industry Trends
Largest Transactions Closed
- Target
- Buyer
- Value($mm)
Advised Western Milling in their sale to the Western Milling ESOP Trust
Executive Summary
M&A activity in the Banking, Finance, and Insurance sector cooled in Q4 2025 with 640 closed transactions (LTM) compared to 791 in 2024. Despite lower volume, the market shows stability as firms focus on core competencies and digital transformation. Strategic buyers led overwhelmingly at 97.5% of deals while financial acquirers remained selective. Valuations shifted as median TEV/EBITDA moved to 9.32x from 10.83x and TEV/Revenue rose to 1.43x from 1.32x. These metrics indicate a market that values revenue stability and long-term market share during a period of consolidation. 1
“While overall deal volume in FIG has moderated, we’re seeing buyers concentrate capital into fewer, more strategic transactions that enhance scale, technology, and long-term revenue stability,” said David Jasmund, Managing Director at PCE. “That dynamic is rewarding platforms with durable cash flows and digital capabilities, even as valuation discipline tightens across the broader sector.”
Market Dynamics
In Q4 2025, Banking, Finance, and Insurance M&A faced a tightening volume environment as total deals fell to 640. Revenue multiples strengthened to 1.43x while EBITDA multiples compressed to 9.32x. Higher valuations were reserved for targets with stable top line performance and specialized financial technology. This trend highlights a shift toward acquiring market share and essential infrastructure to drive future growth despite immediate margin pressures across the broader financial landscape. 1
Buyer Landscape
Strategic Acquirers: Strategic buyers commanded the sector by representing 97.5% of transactions. Acquisitions focused on insurance brokerage roll ups and regional bank mergers to enhance service offerings and achieve greater scale.1
Financial Buyers: Financial buyers accounted for 2.5% of deal volume by targeting high growth advisory platforms. Private equity groups prioritized assets with resilient recurring revenue and strong technological foundations.1
Industry Comparison
The US M&A market reached a pivotal recovery point in Q4 2025, marked by a surge in high-value strategic consolidations as firms capitalized on falling interest rates and a stabilizing regulatory environment. Aggregate deal value for the full year 2025 rose by approximately 45% year-over-year, fueled by a record wave of "megadeals" ($1B+) which saw values jump by over 112% compared to 2024. While overall deal volume remained relatively steady with a modest 2% increase, the concentration of capital into larger, transformative transactions signaled a decisive shift toward aggressive market scaling ahead of 2026. 4 6
Geographic Expansion
Top U.S. States: Texas led with 53 transactions followed by California with 44 and Florida with 35 to highlight key hubs for financial innovation and corporate migration.1
Cross-Border Trends: Although deal flow remained predominantly centered within the U.S. market, international buyers targeted domestic insurance and banking assets to secure stable returns and diversify their holdings against global economic shifts.1
Notable Transactions
Largest Transactions Closed
| Target | Buyer | Value |
| Veritex Holdings, Inc. | Huntington Bancshares Incorporated | $1,882.00 |
| Bamboo Ide8 Insurance Services, LLC | CVC Capital Partners plc | $848.00 |
| Villages Bancorporation, Inc. | Seacoast Banking Corporation of Florida | $711.00 |
| American Collectors Insurance, Inc /J.C. Taylor Insurance, LLC/Condon and Skelly Inc/Heacock Classic | Philadelphia Consolidated Holding Corp. | $615.00 |
| HarborOne Bancorp, Inc. | Eastern Bankshares, Inc. | $482.00 |
| Guaranty Bancshares, Inc. | Glacier Bancorp, Inc. | $476.00 |
| Westfield Bancorp, Inc. | First Financial Bancorp. | $324.00 |
| ArmadaCare, LLC | Cirrata VI, LLC | $250.00 |
| Ryan Specialty Holdings, Inc. | Ambac Financial Group, Inc. | $226.00 |
| Tompkins Insurance Agencies, Inc. | Arthur J. Gallagher & Co. | $223.00 |
Other Financial Buyer Transactions Closed
| Target | Buyer | Value |
| Onset Financial, Inc. | Silver Point Capital, L.P. | n/a |
| Advantage Surveillance, LLC | Align Capital Partners, LP | n/a |
| American Hole 'N One, Inc. | Doxa Insurance Holdings, LLC | n/a |
| Pacific Portfolio Trust Co. | Waverly Advisors, LLC | n/a |
| Pearson Ravitz, LLC | Earned Wealth Advisors, LLC | n/a |
Other Strategic Buyer Transactions Closed
| Target | Buyer | Value |
| Provident Bancorp, Inc. | NB Bancorp, Inc. | $222.00 |
| First IC Corporation | MetroCity Bankshares, Inc. | $205.00 |
| LifeSecure Insurance Company | Dreamscape Industries LLC | $96.00 |
| CFSB Bancorp, Inc. | Hometown Financial Group, Inc | $95.00 |
| TC Bancshares, Inc. | Colony Bankcorp, Inc. | $91.00 |
Source S&P Capital IQ as of 1/2/2026 and PCE Proprietary Data
Emerging Trends
Key trends shaping Financial Services Firms & Banks:
- PE Pivot to Insurance Risk
Private equity is increasingly acquiring insurance carriers to establish permanent capital platforms, shifting focus from fee-based brokerage to managing underlying policy risk and investment portfolios. Avocet Partners (backed by Oaktree Capital) exemplifies this by acquiring and demutualizing carriers to build out its foundational life and annuity platform.3 - Insurtech & Digital Integration and Capital Markets
Insurers targeted tech startups for claims automation and customer platforms, accelerating digital shifts for efficiency. Private equity and public markets continue to drive insurance broker consolidation.4 - Strategic "War Chests" in Insurance Services
Insurance brokers are moving away from purely organic growth, partnering with PE firms to fund aggressive M&A strategies to maintain scale in a competitive P&C environment. This trend highlights a fundamental shift where mid-market agencies are being re-engineered into sophisticated consolidation platforms.2 3 - Subsector Spotlight: Insurance Services
In October 2025, Insurance Office of America (IOA) secured a landmark investment from Madison Dearborn Partners (MDP) and Navacord. This deal signals an "inflection point" for the market, where even firms historically focused solely on organic growth must now pivot to M&A-driven growth to achieve the necessary scale to compete with global consolidators.2 - Subsector Spotlight: Life & Annuity
The sector saw a surge in demutualization deals, most notably EMC Insurance entering a definitive agreement to sell its life division to Avocet Partners for transition into a national annuity platform.3
Outlook for Next Quarter
Opportunities: Continued Fed rate cuts and a pro-business regulatory shift are expected to spark a new wave of "dream deals" and a rebound in the IPO market for tech-native financial platforms.4 5
Risks: Sticky inflation and geopolitical trade tensions, specifically around tariff implementation, remain the primary threats to deal valuations and cross-border margins.4
Predicted Activity: Large-scale "megadeals" will dominate as firms race to consolidate market share, while AI integration remains the leading driver of valuation premiums in the middle market.4 6
PCE Transactions
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