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The Rough Notes Company Inc.



May 27
09:24 2020

Acquisition Acumen

By Brad Unger


The realities of a changing world, decades in the making, brought to light by a single event

Let’s start with the obvious: I’m writing this in May 2020, from home of course, and the COVID-19 virus is currently in full swing. We’re hearing news about a potential “peak,” but there still is a lot of uncertainty in the world. I truly hope that as you read this in June, we’re seeing improvement in our environment from a public health perspective, as well as from an economic perspective.

Alas, there is no guarantee, but we’re a resilient bunch and I have faith in the American spirit.

Over the past few weeks, my colleagues and I have spoken with countless firm owners and producers and we have been truly awed by the amount of time, energy and effort this industry has poured into serving its clients—on insurance and non-insurance topics alike—through this difficult time. To be clear, we’re awed by far more than a set of insurance agents and brokers; many a first responder, medical professional, truck driver and grocery store clerk accepts more personal risk and provides more direct critical services, but we’re each doing our part and insurance agents have not gone unnoticed. Note that I said awed, and not surprised. This industry is full of people devoted to helping others in their time of need, so this “rise to the occasion” is entirely predictable.

Events like this pandemic cause us to reflect and they humble us but, as the proverb says, with humility comes wisdom—wisdom to know what we’re good at and where we need help, our strengths and our limitations. For many, this time of reflection will bring to the forefront the reality that they can not continue to go it alone. Many firm owners will acknowledge that they need a partner to continue to build the business while reducing uncertainty for their clients, for their employees, and for their own personal financial security.

Events like this pandemic cause us to reflect and they humble us but, as the proverb says, with humility comes wisdom—wisdom to know what we’re good at and where we need help, our strengths and our limitations.

Still others will determine that they want to continue to provide opportunity to their next-generation staff (including family) but need to get those people on a platform where they can thrive without the risks associated with owning a small business. There is no shame in this, and it is no sign of weak-ness. It’s just the reality of a changing world, decades in the making, being brought to light by a single event.

So, what do you do now?

First, if you’re one of those firm owners who are thinking that it’s time to partner up, you need to do some research. The market is in flux, but it remains open and there are still plenty of firms that are interested in investing in good firms filled with talented people. While pricing for transactions is less clear at the moment—not many transactions have come to market in the last month—currently pending deals are closing and will continue to do so. More than 40 national and international buyers are focused on the middle market space, and countless more regional and local firms are interested in finding good additions to their business. Working with professional advisers to understand the market, the various types of partners, the current market pricing and, of course, the transaction process is the first step to making a decision as to whether now is the right time to pursue a deal.

Second, if you’ve thrived in this environment and have spent your quarantine time building or rebuilding your tool kit to be stronger and more efficient in serving your clients, you may be well positioned to be the acquiring partner that others are looking for. Acquiring others may provide the scale necessary to further fuel your strength and resiliency, which is a key area of focus for many. As I’ve said for years, deciding to pursue acquisitions is a long-term strategy that should be planned for, rather than opportunistically launched.

To the extent that you’ve got a strategy in place and have been building your network, now’s the time to revisit those relationships and see where people stand. This is not a “blood in the streets” moment to take advantage of dislocation, but rather it is a moment to demonstrate your strength and stability and how you can work together to build something better in the future. For those who want to enter the market but have not yet been actively calling, nothing about this pandemic changes the fact that you need to start with a five-year business plan and a clear vision of what you are trying to achieve and why.

As with any pivotal moment in life, we human beings can’t help but reflect on where we are and where we want to be. At this moment, many are asking the question, do I want to double down on independence, or is there a better way? If you’re finding yourself asking these questions, I encourage you to focus on the big picture, not on the details. Decide what you want in life, and we’ll help you get there.

The author

Brad Unger joined Marsh, Berry & Co., Inc. (“MarshBerry”) in 2015 as a vice president on the Mergers & Acquisitions (M&A) team. In addition to his M&A advisory responsibilities, Brad also is involved with the firm’s financial consulting business. MarshBerry helps insurance agents, brokers and carriers as they work to maximize their value through a variety of industry-specific services. Contact Brad at or (440) 220-5435.

Investment banking services offered through MarshBerry Capital, Inc., Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company, Inc. 28601 Chagrin Boulevard, Suite 400, Woodmere, Ohio 44122 (440) 354-3230.

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