Billions of Dollars are Pouring into the M&A Marketplace
By Phil Trem | Leader's Edge magazine | Jul/Aug 2015
This year is shaping up to be a very memorable one, and it is important to take time to reflect on what we are witnessing.
Okay, so I am talking about the U.S. Women’s National Team winning their first World Cup Championship since 1999 and Joey Chestnut being denied a ninth consecutive win at the Nathan’s Hot Dog Eating Contest (winner Matt Stonie finished with 62 hot dogs in 10 minutes. That’s 17,360 calories).
Maybe more importantly, depending on your perspective, I am talking about all this year’s mergers and acquisitions. Major deals have flooded the industry, which could have significant effects for years. We will all watch closely to see what impact the $18 billion merger between Willis and Towers Watson will have on the competitive landscape, both in the U.S. and abroad. Agents and brokers will also try to better understand what impact the $28.3 billion blockbuster Ace acquisition of Chubb will have on their appointments, commission structures and contingent contracts.
Recent acquisition announcements of top 100 firms—including MHBT (by MMA); Cook Maran & Associates (by Prime Risk Partners, its first acquisition since taking on capital from private equity firm Thomas H. Lee Partners last spring); William Gallagher Associates (by AJG); J.W. Terrill (by MMA); and The HDH Group (by Hub International)—represent yet another string of large, independently held firms partnering with their publicly traded or private equity backed competitors.
A total of 186 announced transactions through June dwarfs all prior years. The closest was the first half of last year when 154 deals were announced. The 32 additional transactions this year is a staggering number when you consider we have only topped 300 deals twice in the history of the industry. It is hard to fathom this level of activity could continue. However, there continue to be signs we are still on the upward trend.