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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Federal Reserve Halts Interest Rate Hikes

During its June 14th meeting, the Federal Reserve decided to keep interest rates unchanged despite increasing rates for ten consecutive times and raising rates a cumulative five percentage points. This reassuring news on the fight against inflation led to a market rebound. The next Fed meeting is scheduled for July 25th and 26th; there are projected to be two more rate hikes by the end of the year. Investors are closely watching for further updates on the Fed's monetary policy.1

Legislators Back Major Bank Reform After Bank Run-Offs

Politicians are advocating for deposit insurance policy reforms in response to the near-collapse of economies caused by bank failures. The FDIC stepped in to bail out small banks by insuring their deposits during the crisis. However, this has raised concerns among the regional bank community about a potential outflow of customers to larger institutions. The proposed reforms will address these issues and ensure the stability of the banking sector.2

IPOs Make a Comeback to US Markets

In recent IPO news, thrift store chain Savers Value Village and fast-casual Mediterranean chain Cava enjoyed positive feedback from the market, making them headline acts. However, after reducing their price ranges, Fidelis Insurance and energy company Kodiak Gas Services faced a lukewarm reception. Additionally, the tech industry experienced an 18-month drought in IPOs, dating back to the last significant IPO of HashiCorp in December 2021.3 4

Insurance M&A Activity Accelerates with $7 Billion in Deals in Six Months

M&A activity in the insurance sector surged with 194 announced transactions worth over $7 billion in value from mid-November 2022 to mid-May 2023. This represents a significant increase compared to the previous six-month period, which saw 263 transactions totaling $2 billion. Lower-value insurance brokerage deals fueled the rise, while three mega deals stood out, including Stone Point Capital's minority (20%) acquisition of Truist Insurance Holdings for $1.95 billion, Brookfield Reinsurance's purchase of Argo Group International Holdings for $1.1 billion, and RenaissanceRe Holdings' $3 billion acquisition of American International Group's treaty reinsurance business. The life and annuity sector also experienced robust deal activity, particularly in large reinsurance transactions.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Truist Insurance Holdings, Inc.
  • Stone Point Capital LLC; Mubadala Investment Company PJSC
  • $1,950.00
  • Ambridge Partners LLC
  • Amynta Agency Inc.
  • $500.00
  • First Bancshares of Texas, Inc.
  • Prosperity Bancshares, Inc.
  • $336.28
  • Limestone Bancorp, Inc.
  • Peoples Bancorp Inc.
  • $215.57
  • Trean Insurance Group, Inc.
  • Altaris Capital Partners, LLC
  • $172.08
  • Surrey Bancorp
  • First Community Bankshares, Inc.
  • $115.54
  • HV Bancorp, Inc.
  • Citizens Financial Services, Inc.
  • $71.21
  • Brunswick Bancorp
  • Mid Penn Bancorp, Inc.
  • $53.92
  • Windmark Insurance Agency, Inc
  • Alliant Insurance Services, Inc.
  • $35.50
  • Noah BankNoah Bank
  • Princeton Bancorp, Inc.
  • $25.40

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Pumpkin Insurance Services Inc.
  • JAB Holdings B.V.
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Business of Bryant Asset Protection, Inc.
  • World Insurance Associates LLC
  • n/a

 

Source S&P Capital IQ as of 7/5/2023 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Poole

Orlando Office

407-621-2111 |

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Kyle Wishing

Atlanta Office

404-994-4186 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Cox, Jeff. “Fed Holds off on Rate Hike, but Says Two More Are Coming Later This Year.” CNBC, 14 June 2023.
  2. 2. Burns, Tobias. “Lawmakers Push Major Banking Reforms Following Near Collapse of Financial Sector.” Yahoo, 26 June 2023
  3. 3. Levy, Ari. “Tech IPO Drought Reaches 18 Months Despite Nasdaq’s Sharp Rebound in First Half of 2023.” CNBC, 30 June 2023.
  4. 4. Reuters. “Consumers Crack Open IPO Door.” Reuters, 29 June 2023.
  5. 5. Wells, Kane. “US Insurance M&A Resilient in a Challenging Deals Environment: PwC.” ReinsuranceNe.ws, June 2023.

 

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