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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Inflation Proves Stickier Than Expected

On December 18th, the Federal Reserve announced a 0.25% rate cut, bringing the range to 4.25%-4.5%, with expectations for only two additional cuts in 2025. This decision was unexpected as it came without notable changes to the labor market or growth forecasts. Experts suggest the move reflects heightened uncertainty surrounding the new administration’s tariff and immigration policies, which could have inflationary implications.1

Bright M&A Outlook

Lower interest rates have improved the M&A outlook for 2025, with Trump’s win likely to boost it even further. Experts anticipate faster deal approvals and a more streamlined process under the new administration. Alex Ferguson, Trump’s FTC chair pick, reinforced this view, pledging to end Lina Khan’s aggressive stance on mergers while maintaining scrutiny on Big Tech to safeguard competition and free speech.2

Strategic Recalibration in the Banking Sector

As interest rates decline, banks must pivot toward alternative revenue streams such as investment banking, debt refinancing, and issuances, as well as asset management fees, which are poised for growth. However, these service-driven revenue streams bring higher costs, particularly in the form of increased compensation expenses and bonuses, as banks compete for talent to support these offerings. To offset these pressures, banks must innovate and improve operational efficiency through technological investment.3

Insurance Services Firms Bet Big on Middle-Market

The insurance services industry continues to see M&A consolidation as Arthur J. Gallagher announced it entered into an agreement to acquire AssuredPartners for $13.45 billion. The acquisition will expand Gallagher’s middle market reach. More specifically, it will increase Gallagher’s reach in the transportation, energy, healthcare, government contractors and public entity sectors. In total, Gallagher has completed over 17 acquisitions this year ranging from other insurance brokers to B2B consultancies. 4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Mcgriff Insurance Services, LLC
  • Marsh & McLennan Agency LLC
  • $7,750.00
  • Bay Community Bancorp
  • CBC Bancorp
  • $128.00
  • HMN Financial, Inc.
  • Alerus Financial Corporation
  • $112.00
  • Oakwood Bancshares, Inc.
  • Business First Bancshares, Inc.
  • $88.00
  • Integrated Financial Holdings, Inc.
  • Capital Bancorp, Inc.
  • $68.00
  • 1st Capital Bancorp
  • West Coast Community Bancorp
  • $60.00
  • Touchstone Bankshares, Inc.
  • First National Corporation
  • $47.00
  • American Savings Bank, F.S.B.
  • 3Edgewood Investments, LLC
  • $45.00
  • American Savings Bank, F.S.B.
  • Davis Asset Management, L.P.
  • $45.00
  • American Savings Bank, F.S.B.
  • JCSD Bishop, LLC
  • $45.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • The National Security Group, Inc.
  • PhenixFIN Corporation
  • n/a
  • Likewize Corp.
  • Genstar Capital, LLC
  • n/a
  • Aquila Air Capital
  • Wafra Inc.
  • n/a
  • Mark of Richmond Inc.
  • DOXA Insurance Holdings LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Washington Business Bank
  • Sound Credit Union
  • $25.65
  • 5 Illinois branch locations in the Southeast Chicago of First Merchants Bank
  • Old Second National Bank
  • $23.00
  • Arlo Bank
  • Arlo Financial Holdings, Inc.
  • $13.69
  • Midland Capital Holdings Corp.
  • The Marygold Companies, Inc.
  • $1.80
  • Murray Gardner Insurance Agency Inc.
  • Arthur J. Gallagher & Co.
  • n/a
  • Afina Insurance Advisors Inc.
  • Arthur J. Gallagher & Co.
  • n/a
  • Esquire Insurance, LLC
  • Inszone Insurance Services, Inc
  • n/a
  • Goodwin Insurance Agency, Inc.
  • Alera Group, Inc.
  • n/a
  • Durham & Bates Agencies, Inc.
  • Arthur J. Gallagher & Co.
  • n/a
  • The Charles W. Bilella Agency Ltd.
  • Schrager Hampson Aviation Insurance Agency LLC
  • n/a

 

Source S&P Capital IQ as of 1/17/2025 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. Nick, T. “Fed Signals Plan to Slow Rate Cuts, Sending Stocks Lower.” The Wall Street Journal, 18, December, 2024.
  2. 2. Justin, W. “Trump Return Signals Revival of Settlements in M&A Enforcement.” Bloomberg Law, 17, December, 2024.
  3. 3. Mike, W. Michelle, G. Val, S. “How—and to what extent—will macroeconomic shifts impact US banks in 2025?” Deloitte, 13, 2024.
  4. 4. Chad, H. “Gallagher to Buy AssuredPartners for $13.5B to Increase Mid-Market Reach.” Insurance Journal, 9, December, 2024.

 

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