Changing insurance regulations see brokers merging
Recent changes to finance industry governance has placed mounting pressure on the insurance broking industry across the board. Changes to insurance underwriting and the introduction of a new financial services licensing regime has driven many operators towards merging as a means to contain increasing regulation costs. As such, there is strong buyer interest in small to medium sized insurance brokers particularly as in-trade buyers are keen on expanding their client portfolio quickly in order to “divvy up” the increased costs. Consolidation seems to be the way forward for the insurance broking industry. This is further supported by the tailored packages now available from lenders that specifically assist those seeking finance for the purposes of acquisition and business growth. We have seen increased buyer interest in insurance broking businesses first hand - and have advised three successful purchaser transactions recently which include:
a.) Insurance broker income level $1m-$2m, price range $2.5m - $3.5m
b.) Insurance broker income level $2m-$3m, price range $4m - $5m
c.) Insurance broker income level $0.5m-$1.5mm, price range $1m - $2m
We have been involved in valuations, sales, mergers and acquisitions of insurance brokers for close to 15 years. Please contact us should you have an interest in purchase or sale of insurance brokers.
Customs and freight businesses unite as demand grows strong
Customs brokers and freight forwarders have traditionally been two links in the import/export chain. The former is responsible for attaining government clearance on goods shipped while the latter manages the logistics. But due to world events, the Australian Federal Government has ramped up its regulations on import management and implemented tighter security measures. At the same time, the increase in trade agreements between countries has encouraged commerce, creating a greater demand for customs and freight services. As such, the industry is under great demand in more ways than one.
The merging of customs broking and freight forwarding seemed only a natural response to the changes and growth of international trade. The level of buyer interest in the customs broker and freight forwarders industry is strong and likely to continue. Due to the current environment, many believe purchasing a portfolio of clients is the most effective way to grow a business in this industry. We have advised on the sale of several customs broking businesses to achieve great results for the purchaser and provide the seller with a favourable price and terms for on-going employment for staff.
Some such transactions include:
Business Type
Location
Income p.a.
Customs Broker
Syd
$500-600K
Customs Broker
Syd
$200-300K
Customs Broker/ Freight Forwarder
Melb
$300-400K
Specialist Freight Forwarder
Syd
$400-500K
Customs Broker/ Freight Forwarder
Syd
$3-4M
Customs Broker
Syd
$200-300K
Jamieson has been involved in valuations, sales, mergers and acquisitions of customs broking businesses for over 15 years. Please contact us should you have an interest in buying or selling a customs broking business.
Response
The customs and freight industries have responded to the changing environment. Many customs brokers and freight forwarders have merged because it’s good business sense. Administrative and logistic errors, which are costly to both the industry and their customers, are minimised when there is only one port of call. This is especially vital in light of increased government regulations. More importantly, the increased demand for customs and freight services has encouraged operators to provide a hassle-free, end-to-end solution to their clients.
