Private equity is growing its footprint in the Dutch insurance brokerage industry. An attractive financial profile, large consolidation potential and the possibility for ‘multiple-arbitrage’ led them to be responsible for 21% of all acquired revenue over the last two years. IG&H and PhiDelphi Corporate Finance jointly investigate the drivers for and impact of the M&A wave that is currently taking place.
Dutch firms active in insurance distribution (‘brokers’) are interesting to various types of investors. Due to this wide variety of potential buyers over 65 large public transactions have taken place over the last two years, and 2020 has already kicked-off with multiple impactful transactions. Recent developments regarding the coronavirus will impact this trend as is discussed below.
The sector is changing as a result of this M&A wave. Valuations have risen to as much as 14-15x EBITDA for the largest advisors and nearly all market segments are concentrating. The overwhelming interest in the sector might come as a surprise as the sector suffers from decreasing commission rates and increasingly stringent legislation. IG&H and PhiDelphi Corporate Finance investigate who the buyers and sellers are, what drives them and what the outlook is for the M&A surge.