Divestiture (MGA) Case Study
Client: Managing General Agency (MGA) Writing Nearly $50MM of Professional Liability
Objective: To identify a potential partner for a profitable MGA, providing the owners with growth potential and an eventual exit strategy.
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 which included highlighting the property in both our email and hard copy newsletter on a confidential basis
- Identified potential buyers and presented them to the company for review
- 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 resulting in a near doubling of the initial offers
Result: The Company entered into a Letter of Intent and subsequent purchase agreement. Merger & Acquisition Services was successful in helping the principals find a growth and exit strategy and providing them with a sales multiple greater than 6x their net earnings.