The Art of the Announcement
When it comes to M&A deals, when, whether, and how to announce the transaction can be a very strategic decision.
In insurance brokerage mergers and acquisitions (M&A), demand by acquirers continues to outpace the supply of firms looking to partner. Serial acquirers have many options to successfully navigate that imbalance, including having a strategy for announcing deals.
Independent buyers can gain useful perspective in understanding how others approach the strategic decision for when, whether, and how to announce transactions. For acquiring firms that transact no more than a few deals a year, what should they consider when a deal is complete? What risks exist for announcing a transaction? What are the benefits?
Insurance brokerages generally follow five strategies for when, whether, and how to announce acquisitions: announcements for all deals, delayed announcements, “pick and choose,” generic announcements, and no announcements.
A well-honed approach can benefit a brokerage, including by demonstrating that it is an experienced and credible dealmaker.
There are risks as well, such as a premature announcement that alerts cyber criminals to the potential for a payday by attacking the newly acquired business of a deep-pocketed owner.
MarshBerry reached out to many of 2024’s top buyers (based on number of announced transactions), asking for their self-reported deal counts for the year to compare against MarshBerry’s list of independently verified announced transactions. (MarshBerry uses multiple resources such as S&P Global Market Intelligence and company press releases to verify transactions.) Additionally, MarshBerry asked these buyers to share insights into their strategies for deal announcements.
Five Strategies for M&A Announcements
While no two firms’ strategies are identical, their approaches to deal announcements appear to fall into five categories:
Announce every deal. Some firms strive to publicly announce every deal they transact in a relatively timely manner, with varying ranges of detail, either through a press release or their website, or being picked up by other independent platforms like S&P Global. Obviously, public brokers are required to do this.
The primary rationale is to drive awareness and recognition of their increased scale and activity. One buyer stated that announcing deals was “critical for all stakeholders—employees, potential acquisition partners, current investors, and future investors.” The company highlighted the added benefit for announcing transactions as “the ability to further hold former agency owners to integration.”
Delayed announcements. Delaying transaction announcements appears to be a common strategy, but with varying reasons. Sometimes a buyer wants to give the acquired firm time to inform its employees and clients and allow them to make their own announcement.
One buyer stated that it often delays deal announcements due to the cybersecurity risks associated with transactions—noting that it is common for a recently acquired firm’s network to be targeted by hackers. “Cybercriminals know that larger buyers have deep pockets, and newly acquired firms may have weaker security during a transitional time. The delay in announcing a deal allows all parties to secure their networks, or integrate platforms, prior to any public announcements.”
Another buyer stated it will delay announcing a deal, sometimes for up to six months, for business reasons—meaning it does not want to put any client or strategic relationships at risk with an immediate announcement, which if done without foresight could open the door to client poaching by other firms.
These delays often create discrepancies in reporting via a press release or company website, especially when deal announcements occur after a quarterly or annual report is published.
“Pick and choose.” Some firms said they “pick and choose” what to announce, which is sometimes based on the type or timing of the deal, or is simply a strategic move to create leverage or credibility for other pending transactions.
Some firms reported that a deal that involves buying multiple firms can still be counted as one deal. One buyer said, “The actual number of deals we do each year has become significantly less relevant to our strategy. We are more focused on affiliations that are strategically aligned with our organization and creates [sic] long-term growth and value.” Another firm stated, “We do not announce [platform] partnerships or tuck-in acquisitions.”
Generic announcements. Some firms prefer generic deal announcements, simply providing a total number of deals on a quarterly or annual basis without specifying company names or other details except potentially the geography that the buyer is expanding in.
No announcements. Finally, certain buyers intentionally do not announce acquisitions. There are different reasons for this, but in some cases the buyer may not be changing the acquired company’s name, isn’t immediately integrating the new acquisition, or simply wants operations and client relations to continue without disruption. Some of these deals are eventually announced by the seller or bank handling the transaction, and that’s when they are counted. (Perhaps several months later.)
Top Buyers’ 2024 Deal Counts
M&A transaction data received from some of 2024’s top buyers reveals interesting discrepancies and highlights the challenges in reporting deal activity.
Some firms reported twice as many deals as their counts of independently verified announced transactions (i.e., Patriot, Alliant, Acrisure). These firms most likely pick and choose which transactions to announce.
When others reported fewer deals than what was independently verified (i.e., World Insurance, Accession, Inszone), MarshBerry found that this most likely resulted from “delayed” announcements when reporting periods are bridged. For example, if a deal was completed in December 2023 and announced in April 2024, MarshBerry would note a 2024 deal while the buyer would cite a 2023 deal. Another contributor here involved multientity acquisitions under a single parent company in which the acquirer stated a single acquisition, but MarshBerry or MarshBerry’s sources broke into multiple respective entities.
Lastly, there are firms like Acrisure and Foundation Risk Partners that rarely, if ever, announce transactions. Both firms are likely top 10 or top 20 buyers but intentionally fly under the radar.
For some of the biggest buyers in this industry, deciding when, or whether, to announce a deal is often done intentionally and based on a strategic plan. Firms new to the acquisition game, take note: credibility is crucial to being a successful acquirer and credibility comes through proven experience that can be announced publicly. However, as some of the most successful buyers have discussed in this article, there can be risks to making a public announcement. Take the time to understand how communicating a business transaction will impact your goals or the goal of a new partnership.
