Business Description
Once in a generation acquisition target for a PEG, MGA, insurance carrier level (to rewrite yourselves), or large insurance agency that is looking for a long term cash flow / ROI play. Retention rates in the 90's, loss ratios in the 60's across the entire book and all carriers. Heavily concentrated in one carrier with a commission rate of 14.5%, primarily P&C personal auto, with about 10% home and <1% commercial. If you never wrote another case and didn't have any referrals (impossible), and just relied on historical retention levels, after 14 years you'd still be collecting $1MM in yearly commissions and would have grossed $31MM!! There are two golden geese in this acquisition: 1) This is a cross sellers paradise. Here lies a pool of 16,500+ health insurance cases, life insurance cases, annuities/AUM type targets, commercial accounts/business owners, the sky is the limit. Assuming only 10% penetration you have an additional 1,500 customers ACROSS EACH DIVISION!! Maybe more is possible, depends on the acquiring entity. 2) Seller is a master at operations management and extracts an industry best production and net income level on a per employee basis. Sprinkle some of that secret sauce into your organization, and consider how much more profitable would you be if you were running at ~$400k in revenue per staff member??? That IP alone is worth the price, let alone the book of business, future commissions, and cross sale empire to secure. Opportunity exists to carve out one of the offices and the home accounts tied to that office, with a multiplier of 5x on $1.5MM in revenue, the 6,500 customer base, the staff of three, net income of $1.3MM, and a target sale price of $7.5MM if the Buyer closes by July 1st. NDA is required for comprehensive 22 page Confidential Information Memorandum crafted by Ace Business Brokers.
Additional Features
Furniture, Fixtures, & Equipment (FF&E): Included in asking price
Facilities: Multi-office acquisition target. Easy leases to absorb or get out of. Clients have been trained to be serviced and supported remotely, 99% direct bill, very few clients visit the subject locations to make payments. Ideal roll up or take over as-is per Buyer preference.
Competition: Insurance is a very competitive industry, but this Agency has weathered the various upturns and downturns due to its impressive size and retention metrics.
Growth & Expansion: A cross selling paradise. Round this out for another million or two in revenue upside if the right Buyer is strong in other lines.
Financing: $16MM Down – $8MM Carry @ 3.0% Over 10 Years!
Support & Training: All employees will stay. Seller will stay for as long as needed per Buyer request and subject to mutual negotiation of a long term satisfactory consulting/employment arrangement.
Reason for Selling: Liquidity event for Seller.