California broker Alliant went out last week and acquired a specialty MGA to complement its real estate stable and increase its presence in the market.
SES Insurance Brokerage Services – which Alliant has dubbed “one of the nation’s most innovative financial institution and real estate investor program administrators” – was acquired on Wednesday.
Greg Zimmer, president of Alliant, said the buy-out was targeted.
“We, at Alliant, about 25% of our overall revenue as a firm is in our MGA business which we call ASIS,” he explained. “SES fits perfectly into our ASIS business and ASIS strategy … we are already large players in the real estate business, from a retail perspective, and what SES does for us is they add another dimension to our real estate business.”
The acquisition would help “generate a larger presence in that [real estate] marketplace for Alliant,” Zimmer said.
“Alliant as a whole is very, very industry focussed,” he explained. “We view ourselves as a specialty broker … there are 10-12 industry verticals where we are very large players on a national scale – real estate being one of them. So this fits into our overall strategy of being strong not only from a retail brokerage perspective, within that industry vertical, but also from a managing general agency perspective as well.
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“They complement what we already have … they really weren’t competitors. What SES brings to the table from our perspective is an added dimension to our overall capabilities. Now, in addition to being a retail broker, we’re also an MGA with underwriting authority and technology – they’ve developed specific technology [to create a better experience for retail brokers] … that we can leverage on a broader scale.”
Zimmer said SES was not shopping for buyers. It was only after checking out the MGA with the possibility of a partnership that Alliant decided to up the ante and make an offer.
“They were not for sale,” he said. “We knew of them … we were actually looking to do business with them. Once we really dug in and better understood their program, their capability, their technology, that was an opportunity to elevate those conversations to more of a partnering conversation and that ultimately led to the acquisition.”
While the price of the buy-out is confidential, Zimmer said the purchase involved cash and Alliant equity.
“It’s important for us that they [SES ownership] still feel like business owners. Our company is roughly 45%-owned by the employees and management of the company,” Zimmer said.
“Alliant is a specialty broker and that’s why this fits in so well: this is a very, very specialized business.”
Despite a company spokesperson stating in 2015 that Alliant was “actively engaged in a national acquisition campaign across all of our divisions”, Zimmer stressed this was not the case.
“We are not heavy acquirers of businesses,” he said. “We really pride ourselves on organic growth. We really use acquisitions as a mechanism to either expand an existing industry vertical or get into a new one.
“We’re not what I would call a serial acquirer – where we’re simply buying a bunch of businesses and we’ll figure out later what we’re going to do with them. That’s not at all how we operate as a firm. Acquisitions for us need to be more strategic in nature.”
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