AGENCY M&A REPORT
Activity rebounds to levels nearing those experienced before the Coronavirus pandemic hit
Today there is significant merger and acquisition (M&A) momentum in the insurance industry. Firms are exploring their options, and overall activity is nearing the levels we saw pre-pandemic.
As of July 31, 2020, there have been 321 M&A transactions announced this year in the United States. We have seen a material uptick in deal activity in the last three months, with total announced deals being up by 54% on average per month since April.
[We] anticipate much more consistency in the last five months and could approach our high-water mark set in 20I9.
In terms of a year-to-date total, 2020 is down 19.1% when compared to 2019 and down 5% from 2018 levels.
The majority of the deals this year continue to be made by buyers backed by private capital (63.5%). We have observed a minor increase in deal activity among these buyers when compared to the last couple of years (they accounted for 57% of year-to-date deals for the first seven months of 2018 and 2019).
Additionally, independent firms accounted for 56 (17.4%) of the 321 announced deals so far this year.
BroadStreet Partners, Acrisure, and AssuredPartners remain the top three most active buyers in 2020. Combined, they have accounted for more than a quarter (26.5%) of all deals announced so far this year.
The Top 10 most active buyers this year completed 170 of the 321 total announced transactions, or some 53% of the total.
Today, there clearly is significant momentum in the industry. The outlook continues to be optimistic, with most buyers resuming deal activity after a temporary pause in April and May.
Through July, we have seen an average of 46 trans-actions per month. If we extrapolate that activity through the rest of the year, we will land around 550 total announcements. However, we do anticipate much more consistency in the last five months and could approach our high-water mark set in 2019.
It’s not unreasonable to say the number of total announced transactions in 2020 could very well approach 600 or more. The big variable is the capacity and bandwidth of firms to complete the number of deals they have under letter of intent. Those that do not get finalized will roll into 2021.
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Disclosure: All deal count metrics are inclusive of completed deals with U.S. targets only. Scorecard year-to-date totals may change from month to month should an acquirer notify MarshBerry or the public of a prior acquisition. 2020 statistics are preliminary and may change in future publications. Please feel free to send any announcements to M&A@MarshBerry.com.
Source: S&P Global Market Intelligence, http://www.insurancejournal.com, http://www.businessinsurance.com/ and other publicly available sources