A prediction from industry analysts at Marsh, Berry & Co. says for the second year in a row mergers and acquisitions will top 500. The prognosis is based on the 289 deals done through the end of July.
Last year’s number ended up at 557 with five of the top 10 brokers completing transactions.
MarshBerry Executive Vice President Phil Trem said his company came to that conclusion after analyzing data from an S&P Global Market Intelligence report and noted it will be the second time 500 has been reached since 2005. That year saw the first time M&A activity hit the 500 figure.
This year private equity-backed broker consolidations are at the top of the list. Others making an impact on the list are public and independent insurance brokers as well as banks and thrifts.
Leading the pack:
• Assured Partners — 19 deals
• BroadStreet Partners — 19 deals
• Alera Group — 18 deals
• Acisure — 17 deals
• Hub International — 16 deals
The amount of money involved in these deals is rising significantly.
Trem went on to say, “The average base purchase price, as of the 12 months ending June 30, 2018, has exceed (eight times) earnings before interest, tax, depreciation, and amortization (‘EBITDA’) for the first time in our records. Demand for quality firms is helping drive the activity and values.”
He does — however — predict a slowdown because of rising interest rates and the recent tax reforms. What Trem wouldn’t predict is when.
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