Huron Capital has formed High Street Partners with industry executives Scott Wick and Randy Koch to pursue a buy-and-build strategy in the insurance agency market.
Prior to partnering with Huron Capital and forming High Street, Mr. Wick was President of The Fedeli Group – a Cleveland-based insurance brokerage – and Executive Vice President & Chief Sales Officer (Midwest Region) for HUB International (he left HUB in February 2016), and Mr. Koch was President and Chief Executive Officer (Midwest-East Region) for HUB International (he left HUB in February 2017).
Chicago-based HUB is an insurance brokerage that provides commercial insurance, personal lines and employee benefits services. The company has more than 375 offices across the United States and Canada and more than 10,000 employees. HUB was formed in 1998 and was acquired in 2007 by Apax Partners in a going-private transaction. In August 2013, HUB was acquired by Hellman & Friedman for approximately $4.4 billion (www.hubinternational.com).
High Street has closed on its initial acquisition with the buy of Peterson McGregor and Associates (PMA), a provider of commercial insurance, personal lines and employee benefits services. PMA was founded in 2000 and has five Michigan offices with a headquarters in Traverse City, MI (www.petersonmcgregor.com). The senior staff of PMA – Steve McGregor, Dennis Muth, Donn Westman and Raquel Paulus – will remain active in their current positions and as shareholders of the company.
“We believe that the expertise and collective networks of Huron Capital, Scott and Randy will serve as a catalyst in moving Peterson McGregor and Associates forward,” said Steve McGregor, co-founder of PMA. “Huron Capital and its operating partners have a long track record of growing companies through acquisition and we are excited to see where the company goes from here.”
Huron Capital invests up to $70 million per transaction in middle-market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include business services, consumer products & services, and specialty industrials. Huron was founded in 1999 and is headquartered in Detroit (www.huroncapital.com).
“We are thrilled to collaborate with Scott and Randy on High Street Partners. We believe they are exceptional business operators,” said Matt Hare, Partner at Huron Capital. “We believe Huron Capital’s executive-led buy-and-build investment model is well suited for this industry.”
According to OPTIS Partners (www.optisins.com), a Chicago-based investment bank that specializes in the insurance agency sector, there were 280 agency transactions in the first half of 2018, down from 333 in the first half of 2017, but still the second-highest transaction volume for the first half of a year. The most active acquirers in the first half of 2018 include Acrisure (Abry Partners) with 41 transactions, followed by HUB (Hellman & Friedman) with 33, and AssuredPartners (Apax Partners) with 19. Private equity-backed buyers in the agency sector completed more than 67% of the total transactions.
The buy of PMA is Huron’s forty-sixth platform investment and High Street is the sixteenth buy-and-build investment initiative that has resulted from Huron Capital’s ExecFactor investment model which partners Huron with CEOs and executive teams to pursue and fund buy-and-build strategies in targeted sectors.
“It is great to be partnering with Huron Capital alongside Randy on this exciting opportunity,” said Scott Wick, CEO and managing partner of High Street. “Huron Capital provides great support for ExecFactor initiatives and we look forward to working together to build a significant platform in the insurance agency industry.”
© 2018 Private Equity Professional | August 21, 2018
