2017 Best Practices Study

118

101

100

95

89

78

Average annual deal total: 77

63

60

55

47

44

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: SNL Financial as of April 2017. Includes whole company, franchise and asset sales.

Data from the 2017 Best Practices Study confirms that top brokers are, in fact, successfully complementing their organic growth efforts with acquisition and fold-in activity. Nearly half of the largest group of agencies (> $25M in revenue) in the Study did deals in 2016.

AGENCIES WITH REVENUES OF:

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

<$1.25M

$1.25-$2.5M

>$25.0M

% of agencies making acquisitions in last fiscal year Average annualized commissions acquired

0.0%

9.1%

10.6%

21.7%

16.7%

43.6%

$ -

$155K

$421K

$395K

$1,769K

$2,593K

What explains the success of private brokers in a hyper-competitive marketplace? How are the underdogs overcoming the odds and finding ways to win, despite clear competitive disadvantages? Here are five key lessons learned from the most successful private broker acquirers. 1) Source proactively . Acquisition opportunities don’t often fall in your lap during a seller’s market like this. Instead, they must be identified and pursued through good old-fashioned prospecting. Leading privately-held acquirers create opportunities through a systematic and perpetual process of identifying and contacting potential acquisition candidates, even though these initial contacts rarely lead immediately to deal discussions. This is because the timing of this outreach will rarely sync perfectly with the agency owner’s timing to sell. But that doesn’t mean this outreach is unproductive. To the contrary, it can open the door to positioning a firm as the preferred acquirer when the timing is right.