Why Use an Intermediary to Sell Your Insurance Agency?

There are many significant reasons to use a professional intermediary to sell your insurance agency. Your best option is to use an experienced intermediary who exclusively specializes in the insurance space. They are skilled professionals who have an in depth understanding of the insurance market. They are experts through all stages of the buying and selling process who negotiate agency transactions daily. The sales process has many intricacies and pitfalls to navigate. It’s an especially complicated, often trying process for most sellers who have little or no experience selling insurance agencies. A professional intermediary has the knowledge and experience to manage and streamline the sales process while guiding you through to ensure that you receive maximum value and a smooth successful closing. Their expertise is invaluable. Agencies that sell with intermediaries receive more money with better terms in less time.

Established in 2008, DCG Services National works with a professional team of experienced intermediaries, merger and acquisition (M&A) transaction advisors. We exclusively serve independent insurance agencies throughout the United States. Our team represents all types of insurance agencies in the marketing and sale of their insurance business. We have key relationships with the most active, top-tier acquirers within the insurance industry, including both private and private equity-backed insurance firms. Our team has successfully completed hundreds of insurance agency M&A transactions. Based on your goals and objectives, we have the market knowledge and experience to strategically guide you through the entire sales process to ensure that you receive maximum value and a seamless, successful closing.

Agency Valuation

Front of hand pointing at graphic with word ValuationA professional intermediary will valuate your insurance agency. All agencies are unique. There is no one set multiple of EBITDA/ Revenue for every agency. There are many factors to consider, free cash flow, net profits, type and quality of revenues, lines of business, carriers, retention rates, office and customer locations, etc. An intermediary has the market knowledge and expertise to analyze, estimate and propose recommendations to increase the value of your agency. They are able to uncover all the value that drives your agency to ensure that you receive maximum value.

Protecting and Maintaining Confidentiality

Confidentiality is vitally important when selling your agency. Over time, it can be extremely difficult for most agency owners who are selling on their own to protect and maintain. An experienced intermediary knows how to market your agency while maintaining strict confidentiality throughout the entire sales process. They will not release any company identifying information to potential buyers until they are screened, qualified and sign a confidentiality agreement (NDA). A professional intermediary works in a discreet, confidential manner while managing the sales process. All phone calls and meetings between buyer and seller will be coordinated and scheduled to protect your privacy. They understand the potential risk to possible harm that customers, employees, competitors or carriers could cause your business if confidentiality is breached before the time is right. Professional intermediaries have strong sound processes to ensure that confidentiality is protected and maintained.

Marketing Your Agency Confidentially, Qualifying Buyers

An experienced intermediary who exclusively specializes in insurance will have an extensive database of various types of strategic buyers throughout the United States. Most often, an intermediary will have the ability to provide you with multiple offers from the best type of qualified buyers for your agency, without having to confidentially list your agency on the market. Often, agency owners who are selling on their own spend an immense amount of time and money working with a buyer they know, only to find out their buyer is unable to secure financing or not willing to agree to the final terms. Many owners end up getting  burned out of the process altogether. A professional intermediary will properly prepare your agency and create a professional marketing package. They have many contacts and marketing tools to find the best qualified buyers for your agency. They will not release any company identifying information to potential buyers until they are fully screened, qualified and sign a confidentiality agreement (NDA).

Chess board with knights from both sides facing each otherExpert Negotiators

Professional Intermediaries are expert negotiators. They strategically negotiate with buyers everyday and understand the strategies they employ. There is really no benefit for an agency owner to directly negotiate with buyers on their own. They are not familiar with or understand the typical terms in a contract, which can lead to bad decisions. Often an owner who is selling on their own will later regret signing an agreement for less money than they should have received or getting burned out during this process, delaying or derailing the sale of their agency. Based on your objectives an intermediary looks out for your interests to ensure that you receive maximum value with the best possible terms! Agency owners that sell with intermediaries receive more money with better terms in less time.

Manage the Due Diligence Process

During this crucial step in the sales process the buyer has a specified period of time, generally a few weeks, to conduct a financial, operational and legal review of your agency. They will verify all the information that you previously provided and most often will request additional documentation. An intermediary will fully prepare you for and manage this process. They will coordinate all document requests, schedule all meetings and advise throughout. During this period, you also have the ability to further investigate the buyer’s financial and business capabilities, as well.

Assist in Buyer Financing

Professional intermediaries have a vast network of relationships with lenders, banks and funding sources that they regularly work with, who specialize in insurance agency acquisitions and financing. They are very familiar with the different types of loans, requirements, guidelines, and the approval process of those institutions. They can support and assist your buyer in obtaining financing, putting together the required documents and keeping to schedule. If needed they can help your buyer negotiate rates and terms. Well over 90% of buyers will need to take out a loan to buy your agency. An intermediary will work with your buyer, offering their support and assistance to ensure financing.

Prepare for Closing

An intermediary will make sure that all contracts, agreements and compliance documents are drafted, prepared and reviewed, ready to be signed by both buyer and seller. They will coordinate and work closely with the attorneys involved in the sale. An experienced intermediary is very detailed and thorough in making sure you are fully prepared to transfer your agency. There are many documents required and details to address for you to successfully transfer your agency. Take the pressure off yourself by using an experienced intermediary.

Additional Benefits

The Seller Can Focus on Running Their Agency

It is very important that your business does not suffer during the often lengthy sales process. A decline in revenues will affect the value of your agency and perhaps your buyer, as well. It is impossible for an owner who is selling on their own to really keep their focus and full attention on running their business. Selling an agency is a time consuming process with many obstacles and time sensitive schedules. With the help of an intermediary to sell your agency, you can focus on running your business. After all, you are an expert at running your agency. An intermediary is an expert at selling agencies.

Act as a Buffer

There are times that emotions can run high during the sales process, especially when negotiating. Selling your business is an emotional time. An intermediary can keep the process running smoothly. They act as a buffer between you and a buyer. They are able to strategically communicate your interests in a professional productive manner that will produce the most positive result.

Help With Documents

From the initial valuation to the due diligence process on through to the closing, there are a significant amount of documents and operational reports that are required for you to sell your agency. An intermediary will help coordinate all document requests. They will make sure all the correct documents are gathered or drafted. They will organize and provide to the correct parties while keeping to schedule. The help of an intermediary is invaluable.

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