Private Equity Pays Up For Insurance Brokerages, Juicing Valuations [Forbes]
The Baldwin Insurance Group, Inc. - Class A (BRP)
Last the baldwin insurance group, inc. - class a earnings: 3/24 04:10 pm
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Source: Forbes
Activity steadily climbing since financial crisis By Xinyi Jiang, Yizhu Wang, with analytics by Philip Segal Insurance brokerage valuations are soaring as private equity firms are actively rolling up smaller players, according to two industry investment bankers and an investor in the space. Consolidation has been constantly active post-2008 About 24 private equity-sponsored insurance brokers and six publicly traded ones are driving the acquisition game in the industry, John Hahn, CEO and co-founder of Oak Hill Capital Edgewood Partners Insurance Center Mergermarket Apax Partners ABRY Partners GTCR KKR Genstar Capital There is an arbitrage opportunity associated with such a roll-up strategy. PEs can buy small players at low multiples and sell the combined platform for a higher multiple. Regional, family-owned insurance brokers with no more than $10 million in EBITDA are usually good tuck-in targets and are selling at 3x-10x EBITDA; brokers with $15 million in EBITDA, an EBITDA margin o
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