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Sunday, 28 September 2014 22:00

Acrisure CEO balances opportunities as insurance industry consolidation heats up

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Greg Williams Greg Williams COURTESY PHOTO

In a 13-month period from July 2013 to August 2014, Acrisure LLC completed 25 acquisitions that took the insurance and benefits firm from $40 million in annualized revenue to more than $200 million. At the same time, it expanded its geography from three states to 14.

Another 10 acquisitions are pending that will add three more states to the Caledonia-based Acrisure’s footprint, and CEO Greg Williams says the company has no intention of slowing down its dealmaking.

“We are a well-oiled M&A machine,” said Williams, a finalist in the Buyer/Seller category in the MiBiz 2014 Deals and Dealmakers of the Year Awards. “We’d love to keep growing at the same pace we are. We don’t know that we’ll be able to do that, but certainly that is something we’d like to keep doing.”

Williams formed Acrisure in 2005 and began acquiring independent insurance agencies in the Midwest, including The Campbell Group in Caledonia in December 2008. Backed financially by San Francisco-based private equity firm Genstar Capital LLC and now targeting deals across the country, Acrisure has deployed about $300 million in capital since July 2013 as a consolidation wave sweeps across the highly fragmented industry.

A midyear report from Chicago-based M&A firm Optima Partners that tracks deals in the insurance industry ranked Acrisure as one of the 10 most active buyers of agencies in the nation.

While M&A activity in the industry is on the rise, the report showed activity during the first half of 2014 hit its highest level since 2008.

“The empirical evidence would suggest the last half of 2014 is the start of a prolonged active period for agent-broker M&A transactions,” the Optima Partners report stated.

One of the top 10 privately owned insurance agencies in the U.S., Acrisure looks to acquire independent insurance agencies with a successful track record, annual revenues of $8 million to $10 million, and whose ownership wants to grow the business and will continue to manage the agency in the local market.

Acrisure typically structures deals as cash-and-stock transactions. Sellers usually receive about 80 percent to 90 percent of the transaction price in cash. The remaining 10 percent to 20 percent typically comes in Acrisure stock.

Acquisition opportunities come by word of mouth and by working with investment banks and M&A brokers “that know us very well,” Williams said. The firm’s growing reputation has also attracted sellers, he added. When Acrisure buys an agency in a market, the local executive team has incentives to bring a new opportunity for a prospective deal.

“Our agency partners are sending us deals. We have new deals sent to us literally on a daily basis,” Williams said. “As we grow, our deal flow just increases.”

In pursuing a deal, Acrisure seeks to acquire independent agencies that provide geographic diversity and will expand its footprint into new markets — especially major markets — or bring in a specialized service.

“We’re not looking to acquire something just for the sake of acquiring. We’re looking for somebody to bring a new product or a new expertise to us that we don’t have. As a result we have an ever-expanding product mix and expertise and talent pool that we can bring to our customers,” said Williams, who views each deal as essentially forming a partnership with the sellers to support their growth in their market.

“We are really aligning ourselves with accomplished business professionals around the country,” he said. “Fundamentally, we’re not changing who they are or how they operate.”

A consolidation trend nationally provides Acrisure plenty of opportunity for further growth through acquisitions. That very opportunity poses challenges, however, in striking the right balance at the corporate level to support that growth and the firm’s local partners, Williams said.

The federal Affordable Care Act has also “created some unknowns” that come with risks and challenges to constantly manage and to disseminate what it means for clients, he said.

As Acrisure has grown rapidly and maintained its acquisition strategy, Williams said he’s proud of how well the company has performed.

“When you’re growing fivefold in a very short period of time, it challenges everybody,” he said. “The team here has really stepped up and done a phenomenal job of managing the process and kind of accepting the personal challenges that it creates and the sacrifices that it creates in terms of time, energy and effort.”

Sidebar: Finalist - Dealmaker: Buyer/Seller

  • Greg Williams, Acrisure LLC
  • Annual sales: Projected $200 million in 2014
  • Full-time West Michigan employees: 150
  • Business description: Insurance, benefits and HR agency
  • Best practices for effective dealmaking: “Our operating model is a strategy and a point of differentiation. With Acrisure, we’re not changing the name of the agency (acquired) and we’re not branding Acrisure,” Williams said. “Our average agency, in terms of the years they’ve been in business, is north of 60 years. So they have established a very nice brand name in the communities they serve. We don’t look to change that, and we don’t look to disrupt how they operate their business. We don’t look to change compensation arrangements with their employees. It really is the least disruptive it can possibly be, and as a result, we’ve gained a reputation of being a friendlier party to do a deal with. That operating model has really become a strategy that has attracted people to us. It’s part of our M&A process.”
  • Personal information: Resident of East Lansing. Wife, Dawn. Father of adult son and daughter
  • Education: Attended Northwood University to study finance
  • Community Involvement: Involved in the Lansing Arts Institute, Sparrow Foundation and the Boys & Girls Club

 

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