BroadStreet Partners Inc to Acquire FMP Insurance Services

BroadStreet Partners Inc whose business model involves acquiring a controlling stake in independent insurance brokers is reported to be in negotiations to bring FMP Insurance Services to be one of there key partners.

BroadStreet invests in entrepreneurially run agencies that are focused on accelerating the underlying value of their agency by executing a two-pronged strategy of acquisition and organic growth. This involves key differentiators:

KEY DIFFERENTIATORS

  • Agency Principals maintain ownership
  • Agency operates autonomously
  • Agency preserves brand identity
  • BroadStree supports growth through access to capital without personal recourse to the core partners
  • BroadStreet empowers agencies to execute an acquisition strategy with legal and accounting support that has, to date, successfully added on over 260 acquisitions
Broadstreet invest in firms that they expect to be successful in their own right, and they are committed to helping core partners identify opportunities for further growth through tuck-in acquisitions and leveraging the benefits of economies of scale to drive organic growth. This allows the insurance company to gain access to additional insurance markets for your agegency, acquire and merge agencies, and grow the value of your agency.

Each core investment is negotiated individually within a proven framework based on the specific characteristics of the firm and the goals of its principals. The specific structure of each investment is tailored to meet the needs of the individual partner, with a meaningful equity interest retained by its management.

BroadStreet’s investment structure aligns the interests of the core partner, its clients, and BroadStreet. Agency principals retain control of the day-to-day operational management and distinct culture that has shaped the success of their agency.

BroadStreet’s approach provides a mechanism whereby agency Principals can individually realize the value of their retained equity and over time transfer their interests to the next generation within the firm. When BroadStreet makes an investment, the agency’s ownership is often distributed among the agency’s management team, which provides a strong financial incentive for the agency’s leaders to increase the value of the agency.

FMP Insurance Services would be a welcome acquisition for the group who have until recently solely focused on the US. With FMP Insurance Services being a commercial insurance broker as opposed to dealing with retail clients the necessary red tape in a high regulated marked is reduces significantly.

Furthermore, due to the larger scale insurance policies there is significant profit potential. What is believed to be most interesting to Broadstreet is the number of policies FMP Insurance Services have negotiated in relation to the property construction market with ABN Amro, Scotia Bank and Credit Agricole all entering the market in joint vnetures with FMP Insurance Services.

In the US there still is a huge void in bank lending for the construction sector due to the subprime lending fiasco 10 years ago, which resulted in the Federal takeover of Fannie Mae and Freddie Mac. Broadstreet are believed to eager to enter into this large growth sector.

15th March 2017 by Lucy Stevens