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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Interest Rate Cut Boosts M&A Momentum

On September 18th, the Federal Reserve lowered interest rates by 0.5% to the 4.75% – 5.00% range. The Fed aims to reduce rates while keeping inflation at bay and ensuring employment remains high. This rate reduction, along with expectations of further cuts, are anticipated to stimulate M&A activity. Historically, lower rates have led to increased leverage and higher valuations, which will benefit both business owners and investors considering an exit strategy.1

Banks Bet Big on Fintech

Banks continue investing in the fintech space to improve efficiency, provide convenience to their clients, and differentiate themselves from competitors. Key focus areas include payments, lending, and wealth management. For example, United Fintech Group, a global acquisition firm that acquires and integrates fintech companies, has garnered backing from Citigroup, BNP Paribas, Danske Bank, StanChart, and many others, helping banks stay competitive with cutting-edge technological solutions.2

Surging Insurance M&A Market

M&A activity in the insurance industry continues with two recent “headline” transactions. Ryan Specialty, a public insurance services company, acquired US Assure Insurance Services, a Florida-based firm specializing in middle-market builder’s risk insurance, and Greenhill Underwriting Insurance Services, a surplus lines provider for small-to-mid-sized healthcare businesses. Rounding out the final days of the third quarter, Marsh McLennan, announced its acquisition of McGriff Insurance Services for $7.75 billion cash. The acquisition expands Marsh’s insurance brokerage operations and strengthens its footprint in commercial property/casualty, employee benefits, management liability and personal lines insurance.3 4

Political Uncertainty is Shaping M&A Activity

With no clear front-runner in the upcoming presidential election, strategic buyers are hesitant to engage in M&A as a change in administration could lead to regulatory shifts. However, the Fed’s recent rate cut has provided some stimulus for strategic deals. Private equity firms, less concerned about the political landscape, saw a 42% jump in Q3 activity to $166.2 billion, mainly driven by easing financial conditions and the need to deploy significant reserves of dry powder.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • National Western Life Group, Inc.
  • S.USA Life Insurance Company, Inc.
  • $1,837.00
  • US Assure Insurance Services of Florida, Inc.
  • Ryan Specialty, LLC
  • $1,475.00
  • Battea Class Action Services, LLC
  • SS&C Technologies, Inc.
  • $670.00
  • Macatawa Bank Corporation
  • Wintrust Financial Corporation
  • $565.00
  • Cambridge Bancorp
  • Eastern Bankshares, Inc.
  • $527.00
  • MidCorp Insurance and Entertainment Property and Casualty Insurance business of AAIC, CIC, IFC, NSC
  • Arch Insurance North America
  • $450.00
  • California BanCorp
  • California BanCorp.
  • $230.00
  • Codorus Valley Bancorp, Inc.
  • Orrstown Financial Services, Inc.
  • $205.00
  • FNCB Bancorp, Inc.
  • Peoples Financial Services Corp.
  • $130.00
  • SimplyBank.
  • First Financial Bank, National Association
  • $73.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Sycamore Specialty Underwriters, LLC
  • Undisclosed
  • $6.50
  • Powderhorn Agency, Inc.
  • Coleville Partners, LLC
  • n/a
  • Safe-Guard Products International, LLC
  • Hellman & Friedman LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Conifer Insurance Company
  • Bishop Street Underwriters
  • $70.00
  • Insurance Agency operations of Conifer Holdings, Inc.
  • Bishop Street Underwriters
  • $70.00
  • Community First Bancorporation
  • Dogwood State Bank
  • $57.92
  • Funding Circle USA, Inc.
  • Ibusiness Funding, LLC
  • $41.88
  • CBB Bancorp
  • Southern States Bancshares, Inc.
  • $27.06
  • Mountain City Branch
  • Skyline National Bank
  • $25.00
  • Consolidated National Insurance Company
  • Hagerty, Inc.
  • $18.40
  • Cornerstone Financial Corporation
  • Princeton Bancorp, Inc.
  • $17.91
  • VersaBank USA, National Association
  • VersaBank
  • $13.50
  • Midland Capital Holdings Corp.
  • Midfed Acquisition Corp.
  • $12.66

 

Source S&P Capital IQ as of 10/10/2024 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. Baird. “Fed Rate Cuts a Catalyst for M&A Activity.” Baird, 23, September, 2024.
  2. 2. Bloomberg News. “StanChart invests in fintech M&A company, joining Citi, BNP.” Bank Automation News, 8 August, 2024.
  3. 3. Kenneth, A. “Ryan Specialty completes acquisitions of US Assure and Greenhill.” Insurance Business Magazine, 4 September, 2024.
  4. 4. David, P. “Marsh McLennan to Acquire US Broker McGriff for $7.75 Billion.” BestWire, 30, September, 2024.
  5. 5. Anirban, S. Andres, G. “M&A seen slowing ahead of US elections after uneven third quarter.” Reuters, 26, September, 2024.

 

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