Insurance Brokerages Placed Premium on Corporate Culture

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After years of spurning suitors, Keenan & Associates is getting hitched.

The Torrance-based insurance brokerage – L.A.’s fourth largest, with 2015 revenue of $170 million – announced last week it was being acquired by AssuredPartners Inc. for an undisclosed sum.

Keenan Chief Executive Sean Smith said the deal finally came together after a “thoughtful process of getting to know each other,” which finally convinced the company to sell.

“In the insurance distribution space, there’s been a tremendous amount of consolidation, and over the years we’ve fielded numerous offers,” Smith said. “Recently, we had more and more calls and finally we decided to take a real listen and liked what we heard from AssuredPartners.”

Keenan’s client base is made up mostly of California schools, community colleges, municipalities, and health care organizations. The firm helps manage workers’ compensation, medical, and property and liability insurance, according to Smith. The firm had L.A. County revenue of $74.9 million last year. (See page 14.)

While a confluence of company culture was a big factor in sealing the deal, there were also several practicalities at play. Smith said Keenan had been looking to expand through M&A transactions for some time, but the company couldn’t find the capital to do so. With the backing of the larger AssuredPartners, those problems are expected to fade away.

“Now we can be an anchor in California (for AssuredPartners) to do that,” Smith said. “They have the expertise and the capital to really do this stuff.”

The Keenan acquisition is a big deal in the industry and pushes AssuredPartners closer to the top 10 of U.S. insurance brokerages, with some $725 million in combined revenue. The company ranks No. 13 nationwide, according to industry publication Business Insurance.

Tom Riley, the Lake Mary, Fla.-based company’s president and chief operating officer, said in a statement that the companies’ complementary operations would allow AssuredPartners to continued growing.

“Keenan’s expertise and ongoing commitment to the public entity and health care markets, combined with AssuredPartners’ resources, will enable the combined company to continue to grow and serve our customers,” Riley said.

Smith added that AssuredPartners was specifically interested in pushing out some of Keenan’s business strategies into its network of brokers and using the company’s California network to help achieve scale.

Keenan, which has 730 employees in California, has its biggest presence in Los Angeles with approximately 400 associates working out of its Torrance headquarters. The company also has a large office in Riverside with 110 people.

This deep penetration into the California market is something AssuredPartners lacked, Smith said.

“California is no doubt a huge market in the insurance space and we instantly give them a platform,” he said.

Tim Cunningham, a principal at Chicago investment bank Optis Partners, represented Keenan.

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