2020 Specialty M&A Year In Review
MarshBerry Director, George Bucur, focuses on serving specialty firms and provides perspective on many factors influencing transaction activity, deal structure and valuations. 2020 was a resilient year in the specialty distribution M&A space. Even with a turbulent first half, the total number of deals recorded surpassed 2019 totals with new buyers entering the market.
Video Transcription
Hello and Happy New Year! My name is George Bucur. I’m a director within MarshBerry’s financial advisory practice.
Serving specialty distributors such as MGA’s (managing general agent), MGU’s (managing general underwriter), program managers and wholesale brokers, we are bringing you this periodic vlog to talk through updates within the specialty distribution sector. Today, we’re focusing on the M&A (Mergers & Acquisitions) and Valuation Review for 2020, and what a year it was!
The overall M&A activity, even though it went through a pandemic period, turned out to be more overall transactions in 2020 than 2019 in general, but specifically, specialty distributors came roaring back in the second half of 2020. Specifically, there were 120 specialty distributor transactions announced, and that was compared to previous highs of 96 transactions in 2019 and 85 transactions in 2015. Even more remarkable, those 120 transactions per MarshBerry’s estimates were comprised around 6% of the specialty distribution sector.
Now, when it comes to buyer types within the specialty distribution marketplace, private equity really made a lot of ground comprising around 50% of transaction activity. And the key buyers driving that were Risk Strategies, division of 180 intermediaries, and also Integrity Marketing Group with 11 and 15 transactions respectively. Another buyer type of note are the carriers. Carriers had 18 transactions in 2020, which is the highest that we’ve ever seen per MarshBerry’s tracking. Now, when it comes to valuations, valuations were just as resilient in 2020, keeping up or even sometimes exceeding on average the transaction multiples that we were seeing through earlier in 2020 and prior. 2020 was a great year! We are now looking forward to 2021, where we see a lot of that same momentum going forward.
If you have questions specifically around the M&A transaction activity or valuations, feel free to reach out. Until then, we’ll see you next time when we further explore the specialty distribution marketplace.
MarshBerry is a global leader in investment banking and consulting services, specializing in the insurance brokerage and wealth management sectors. If your firm seeks expert advisory guidance to refine your business strategies, drive sustainable growth, or facilitate a sale, MarshBerry is the ideal partner to support you in making these critical business decisions. Collaborating with a trusted advisor who deeply understands your business and the industry can help you maximize value at every stage of ownership.
