Divestiture (MGA) Case Study

 
 

Client: American Collectors Insurance, a Managing General Agency (MGA) writing nearly $50MM of classic and antique automobile business.

Objective: To identify a potential acquisition candidate for the client, allowing the family shareholders to exit the business.

Our Process: Led by a senior advisor, Merger & Acquisition Services undertook the following initiatives:
 
 
 
  • Worked with the owners to understand their rationale for selling the company and structure an appropriate exit strategy
  • Assisted in writing a Confidential Informational Memorandum (CIM) including an operating model to be used by prospective buyers
  • Utilized our firm’s industry contacts and proprietary database to create a marketing process designed to maximize value for the client
  • Identified potential buyers, both strategic and financial presented them to the client  for review
  • Secured over 8 indications of interest for the client to review and analyze
  • Led due diligence meetings for the client with a select group of prospective buyers
  • Worked with both the client and prospective buyers in developing valuation models, return on equity scenarios and due diligence
  • Analyzed the proposals with the client to assist them in assessing the best offer from multiple perspectives
  • Assisted in negotiating the final terms of the transaction and structuring of the purchase agreement with the ultimate buyer
Result: The shareholders of American Collectors competed the sale of the MGA to NSM Group that included 100% of the proceeds to be paid in cash at closing and reflected a market multiple just over 10x the MGA’s EBITDA.

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