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Economic uncertainty can cast a shadow of doubt over potential deals in the realm of mergers and acquisitions (M&A). In this article, we’ll explore some creative financing strategies that can help facilitate M&A transactions even in uncertain economic times.
What is generally less understood is the impact of the pandemic on the debt markets. Many PE-backed Insurance Brokers Secured Sizable Loans Immediately Prior to the Crisis Over the past several years, the demand for high yield debt issued by private equity (PE) backed insurance brokers has been extremely strong.
In such cases, evaluating the financial health of target companies and understanding their debt structures is crucial. While it provides capital without the burden of debt repayment, it dilutes ownership and may involve relinquishing some control. Debt Financing: Debt financing involves borrowing money to fund your acquisition.
For owners and executives of private insurance brokers, Brown & Brown's first quarter earnings call provides a treasure trove of information. insurance brokers. The typical PE-backed broker is levered at 6.0x That is, for every $1 of EBITDA they have $6 of debt. billion of debt given the 6.0x
First, these brokers each have growth strategies whose success is measured by the expansion of revenues and EBITDA. Furthermore, as we have reported in previous blogs, these agencies already had their equity and debt capital lined up before the full force of the pandemic hit. There are two principal reasons.
The Largest Strategic Players Tell Us Full Steam Ahead – The major strategic acquirors have informed us that they plan to continue to aggressively pursue acquisitions of insurance brokers. These strategic acquirors typically have both their equity and debt facilities in place, so there is no shortage of capital.
A classic example of T-Bills in action occurred during the European Sovereign Debt Crisis. Investors, wary of the uncertainties in European debt markets, turned to U.S. Debt Ceiling Crisis , T-Bills experienced an unusual yield spike as investors momentarily questioned U.S. Represented by the full faith and credit of the U.S.
This means that it’s not just based on the financials of the business – it’s also based on factors like the industry, the location, and even the current economic climate. One of the best ways to get an accurate estimate of your business’s value is to talk to a broker or an appraiser.
No one really knows how the pandemic will play out from a medical, economic, political, and societal perspective. Then the Pandemic Hit In summary, when the pandemic hit, the PE markets reached an unprecedented level of dry capital, fueled further by remarkably cheap debt. We face a future of uncertainty.
To do this, they work with registered broker-dealers that are legally able to raise money on behalf of companies. They also partner with other broker-dealers in the United States and have a chaperone broker-dealer arrangement which allows foreign broker-dealers to have oversight of American broker-dealers when working in the US.
They have enormous amounts of dry powder that they must deploy and continue to have access to very inexpensive debt. This blog post analyzes the significance of the statistics included in our ,, Second Quarter 2020 Sica Fletcher Agency & Broker Buyer Index. Now we have the data that backs up our initial observations.
With the expertise of Mergers & Acquisitions Adviors / business brokers like Lake Country Advisors, you can navigate this complex process effectively. However, regardless of the chosen method, the guidance of a seasoned manufacturing business broker can be invaluable.
Consider Various Factors During Valuation: Various factors should be considered, such as cash flow, debt levels, earnings history, and growth prospects. The post Understanding Valuation: A Beginner’s Guide for Family Business Owners appeared first on Sun Acquisitions | Chicago Business Broker and M&A Firm.
EBITDA Multiples for Insurance Agencies, 2018-2024 (Projected) M&A Deal Volume for Insurance Agencies, 2018-2024 (Projected) *S&P Global Data taken from ,,, “Insurance Brokers and Servicers Sector View 2024” The most important news this data offers is that insurance M&A is not actually in the tailspin that many “experts” claim it to be.
Whether you’re in the manufacturing, healthcare, or technology sector, engaging local business brokers can streamline the process, providing expert guidance to maximize the value of your business. Equally critical is the evaluation of liabilities, including debts and loans, which profoundly affect your business’s market value.
With insights from experienced business brokers , you can achieve your goals and secure a smooth transition for your company. Liabilities : Consider all outstanding debts, loans, and lease obligations. Use a business broker to facilitate conversations and maintain professionalism.
Longer term, the new Government will face a number of aggressive assumptions regarding UK growth and tax revenue, with implication for absolute debt service levels. That is something that the mid and smaller brokers can access relative to the bulge bracket who don’t really see that as an important USP for the business right now.
This is even more interesting when we view the rate of return for these insurance agencies, which has actually dropped below the cost of acquiring debt for a transaction, creating a negative spread for the first time in M&A history. It used to be the case that equity structures consisted of senior debt (i.e., in 2020 to 9.5%
These changes are designed to improve market stability, increase transparency, and mitigate systemic risks in bond markets, affecting everything from Treasury securities to corporate debt. Particularly, with a shift from transparency solely being held by broker dealers, to the buy-side. “As
rn Concept 6: Tailored Due Diligence Services For Clients rn One key aspect of conducting due diligence is ensuring that the business being acquired is financially stable and can cover its debt. They need to look for businesses that are solid and can withstand economic downturns.
In March, it was purchased by rival Swiss bank, UBS, in an emergency sale brokered by Swiss banking regulators. This scenario will have a disproportionate, negative effect on both commercial real estate borrowers and small-to-medium-sized businesses that aren’t large enough to access the public debt markets. Outside of the U.S.,
It is written in a way that will help you, in case you decide to go about the process without a business broker. You are always welcome to call us or talk to any business broker about the state of the business world. As such, you should hire a consultant or a business broker to help you with setting up your marketing package.
The transcript highlights the need for the financials to tell the true story of the transferable economics of the business. The speakers explain that without clear financials, it becomes difficult for a buyer to assess the transferable economics of the business.
For Deepe Raja, hard currency sovereign and corporate debt emerging markets trader set to celebrate his tenth year at BlueBay later this year, it’s the range of country-specific macroeconomic factors that influence liquidity in the emerging markets which make them so interesting to trade.
Visma Visma is a developer of cloud enterprise software that digitizes core business processes in the private and public sectors, including accounting, ERP, procurement, payroll, and debt collection solutions. The company made 12 software deals in the past 12 months ending June 30, including three in 2024.
b' E217: The Current State of Buying and Selling E-commerce Businesses with George Moulos - Watch Here rn rn About the Guest(s): rn George Moulos is an entrepreneur and the founder of Ecommerce Brokers, a company specializing in buying and selling online businesses, especially within the e-commerce, agency, and SaaS spaces.
In the current uncertain economic climate, buyers are looking for sure deals that are less impacted by the economy. In the current uncertain economic climate, buyers are more risk-averse and are looking for sure deals with steady growth and well-managed operations.
By mandating banks to hold more capital in reserve, Basel III’s goal is to improve the stability and solvency of financial institutions, alongside reducing the possibility of bank failures during periods of economic turmoil.
Many clients have asked us our views about how the COVID-19 pandemic will affect the insurance brokerage industry broadly and the M&A and strategic market for brokers in particular. Some of the economic predictions regarding the economic impact of the coronavirus on the economy and GDP are quite dire.
As we have reported throughout the year, the M&A market for insurance brokers remained at peak, pre-pandemic levels despite all of the public health, political, social, and economic dislocations. We do not know if and under what terms the COVID-19 rescue package and long-term economic recovery plan will be passed.
It reflects its ability to generate consistent revenue, maintain profitability, and sustain operations during economic fluctuations. Debt-to-Equity Ratio: A ratio below 2:1 is considered manageable. Businesses with excessive debt could face challenges during downturns or struggle to finance future growth.
Below is information for eligibility requirement for the PPP loan forgiveness poste by VR Business Brokers. Click for the pdf format for this article. The legal form of a PPP loan is debt. The rules on forgiveness are currently in flux, but a new form on forgiveness was recently issued by the SBA.
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