MYTH #4: Selling an Agency is the Same as Buying One

IN THIS FEATURED SERIES, WE DISPEL THE MYTHS ABOUT SELLING AN AGENCY

Our clients, Richard and Raymond*, spent a few decades in the corporate world running large sales teams for an insurance company. They decided to exit the career path to pursue their own entrepreneurial ventures. In a short period, they built a $6M revenue P&C agency through dozens of acquisitions, drawing from their extensive management skills and industry knowledge. As time progressed, and through consultation with ABC, they recognized that the market was right for exiting the venture by way of a sale of the business.

Although Richard and Raymond had acquired dozens of agencies and were contacted regularly by large firms looking to acquire them, they knew the value of letting a professional M&A advisor handle the transaction and asked Agency Brokerage to facilitate the process. ABC, being entrenched in the marketplace, identified the best buyer for their agency, facilitated negotiations, and managed the transaction process to closing, including helping overcome several potential deal-killing issues. Additionally, ABC introduced Richard and Raymond to a tax advisor that helped them reduce their taxable gain by 7 figures.

In the end, Richard and Raymond netted millions of dollars more from the venture than they anticipated, perpetuating the business to a larger firm seeking to grow in their market. Years later, the two remain friends of our firm and, in the words of Raymond, “Any time you want me to sing your praises to someone, have them call me.”

The lesson learned from Richard and Raymond, seasoned acquirers, is that even buyers seek representation when selling their agency.