BenLooking
New Member
- 8
Trying to get some assistance from those in the IA field who may have experience either on the buy/sell end or market valuation(s) as to a fair market value ballpark for a Non-Standard Auto ONLY Agency & Premium Finance Company that I am currently in talks with.
I've proven up the income/expenses & revenues via the Carrier Statements, Tax Returns & other financials. Trying to zero in on the right price.
Asking was roughly $575/550k; which I believe is high. Everything I have seen in my past research; valuations for a Non-Standard (not in financial distress) tend to be in the .75 - 1.0 times annual Agency Revenues. Owner has never bought nor sold an Agency - his pricing leans more towards a Standard/Preferred IA agency on Direct Bill.
Agency Details:
Corporate Agency Revenues:
2016: 339k
2017: 338k
2018: 319k
2019 (ends 6/30/2020): currently revenue at $132k to date through 12/31/2019; down 17k to last corp fiscal year, although 3rd Corporate quarter (Jan-Mar) tends to be biggest quarter of the year.
Anyone with experience in this field/valuations have any thoughts or feedback?
Thanks in advance, gentlemen!
I've proven up the income/expenses & revenues via the Carrier Statements, Tax Returns & other financials. Trying to zero in on the right price.
Asking was roughly $575/550k; which I believe is high. Everything I have seen in my past research; valuations for a Non-Standard (not in financial distress) tend to be in the .75 - 1.0 times annual Agency Revenues. Owner has never bought nor sold an Agency - his pricing leans more towards a Standard/Preferred IA agency on Direct Bill.
Agency Details:
- Agency has been around 40 years & owner is retiring; no family to leave it to. Big City, office has been in the same spot since day one with busy street frontage. One girl would be staying on - she's a key piece. Lost a long time employee in 8/2019.
- Agency renewal rate runs right around 80%, which is obviously high for a Non-Standard Agency.
- Revenues are slowing declining. Agent in 70's with health issues. Most of his referral pipelines are gone/retired, so not writing as much new business as in the past.
- Agency Bill - all financials done on paper, in house by current Agent: files, ledgers & individual policy accounting cards. It would need to be moved to an Agency Management System.
- All Furniture & Equipment come in purchase. 5 newer Computers, used for the Comparative Rater. 20yr old Steelcase desks in great shape, chairs, file cabinets, printers, etc.
- Premium Finance Company: Also handled in house on paper. Generates roughly $30k of the Agency revenues.
- 8 Carriers Represented - 7 pay 25%, 1 pays 20%. 6 & 12 month policies available.
- No Preferred Standard Carriers; No Home, Commercial or other lines of insurance in Agency.
- I am making an ALL CASH offer, not asking seller to carry back anything; which is what I know he's looking for.
- How does this Covid19 situation affect pricing/risk is an uncertainty, especially depending on how long it drags out thus affecting customers ability to pay their bills (insurance).
Corporate Agency Revenues:
2016: 339k
2017: 338k
2018: 319k
2019 (ends 6/30/2020): currently revenue at $132k to date through 12/31/2019; down 17k to last corp fiscal year, although 3rd Corporate quarter (Jan-Mar) tends to be biggest quarter of the year.
- My Proforma Expenses would be roughly $195k annually.
Anyone with experience in this field/valuations have any thoughts or feedback?
Thanks in advance, gentlemen!
