In a recent
Insurance Business poll, 71% of readers admitted that they would either sell or consider selling their brokerage to a large enough insurer or direct writer for a large enough sum.
While there are countless benefits to remaining independent, it is understandable why some brokers and insurance professionals are interested in an acquisition. For Stephen Oxley, Senior Advisor at Burns & Wilcox Canada and former president of Toronto-based Avec Insurance Managers, it came down to timing.
“There were a number of things that came into play, but the trigger was probably that I had a partner who was looking to retire,” Oxley said.
Since Oxley’s family members were not interested in succession, he was faced with a choice: take out a loan to buy out his partner’s stake in the business or attempt to sell his independent specialty wholesaler. He chose the latter.
Before engaging in negotiations, Oxley found it imperative to discuss preferred conditions of the deal with his business partners. While they had a target price point in mind, this was not the top priority for the company’s founders.
“We wanted a similar culture,” Oxley said. “We started from nothing so we were entrepreneurial, and we were looking for a similar type of organization.”
In order to determine whether potential buyers were a good fit, the leadership team conducted their own form of due diligence: driving to the company’s headquarters and meeting with all levels of staff there.
“That gave us an opportunity to see what the office was like, to meet with the CEO, meet with senior personnel and just get the flavor of the organization,” Oxley said.
Oxley ended up agreeing to a deal with Kaufman Financial Group, which owns Burns & Wilcox Canada, both because of its complementary corporate culture and the fact that it could help fulfill Avec Insurance Managers’ ambitions to expand into the United States.
But more than anything else, Oxley chose his acquirer for one fundamental reason, a non-negotiable from the start: he knew it would treat his employees well.
“One of the biggest problems was keeping it under wraps because we didn’t want our staff to know we were considering anything and raise their anxiety level or get them off focus,” Oxley said. “We essentially told them the day the sale was effective because at that point we could tell them that their jobs were safe, they had work with a new employer and the contracts were already prepared for them.”
