Mike Bruce recently spoke to Insurance Post Magazine about mergers and acquisitions in the broking sector. Whilst the economy has been suffering under the weight of the pandemic, M&A activity in our sector has continued at pace, with a number of significant broker consolidations announced this year and GRP completing six deals in the last 3 months alone.
Mike picks out some key drivers that have maintained this momentum despite the grim economic backdrop.
From a macro-economic perspective, speculation about the possibility of reforms to entrepreneurs tax relief and capital gains tax have brought a sense of urgency. As for GRP’s deal flow, Mike points to a focus on in the long term, rather than short term success of acquisitions which means that quality businesses still command a strong valuation. To support this long term view, earn out deals have been adjusted to recognise short term covid related pressures on earnings and allow for longer term claw back.
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