GRAND RAPIDS — Acrisure LLC has acquired the insurance practice of Tulco LLC, a provider of artificial intelligence and machine-learning technology based in Pittsburgh, Pa.
This $400 million deal “enables true deployment of ‘insurtech at scale’ as it combines the global distribution power of Acrisure, the fastest growing broker in insurance industry history, with the world-class, proven AI expertise of Tulco,” according to an announcement from Acrisure.
The acquisition follows a year-long partnership between Acrisure and Tulco and the formation of Altway Insurance, an AI-backed insurance brokerage initially focused on individual health benefits.
The deal announced today was structured as a stock-for-stock trade, with Tulco becoming a significant minority shareholder in Acrisure. Tulco Chairman and CEO Thomas Tull “will be actively involved in the strategic direction of the company” as chairman of the new Acrisure Technology Group, according to the company.
“Businesses that succeed in the medium to long term must be nimble, data-rich and digitally oriented,” Acrisure co-founder and CEO Greg Williams said in a statement. “The transaction with Thomas Tull and the Tulco team accelerates our ability to do all the above.”
Tulco’s capabilities should allow Acrisure to “fully harness AI capabilities to rapidly innovate the product development and insurance sales and marketing process across its portfolio of agency partners,” Acrisure said in a statement.
“We’ve worked with the Tulco team for almost a year and our vision for Acrisure and the industry are completely aligned. Tulco’s world-class talent and ability to apply AI and intelligent automation is immeasurable as it relates to meeting the needs of our clients and transforming our company,” Williams said. “I’m excited about what we will create together.”
Grand Rapids-based Varnum LLP served as legal counsel in the transaction with a legal team led by corporate partners Michael Wooldridge and Seth Ashby. Varnum also has represented Acrisure in many of its acquisitions in recent years.
Acrisure over the years has become one of the world’s largest commercial property and casualty, life and employee benefits brokerages through an aggressive acquisition strategy. After making more than 500 acquisitions in the last several years, Acrisure has grown to more than $2 billion in annual revenues and has location in six countries.
Through the first half of 2020, Acrisure closed on 39 deals for insurance brokers in the U.S., according to Optis Partners LLC, a Chicago-based firm that tracks M&A in the industry. Acrisure, by far the largest acquirer in the industry, made about the same number of acquisitions in the first half of 2019.
Optis Partners noted in its recent report for the second quarter that transactions “continued to be closed” during the second quarter despite the COVID-19 pandemic, although “a number of buyers dramatically slowed their M&A activity due to travel and meeting limitations and concerns over the certainty of revenue projections.”
“We anticipate the slowdown in M&A activity to continue at least through the third quarter and possibly beyond until there is more certainty of the impact from COVID-19 and buyers can rebuild their M&A inventory,” according to the Optis Partners report.
The firm tracked 288 transactions in the first half of 2020, a decline from the 328 in the first six months of 2019.
The second quarter alone had 126 closed transactions, the lowest deal volume since the fourth quarter of 2016 “as the COVID-19 pandemic creates uncertainty in the marketplace,” according to Optis Partners.
EDITOR’S NOTE: This story has been updated to note the value of the transaction and that Varnum LLP served as legal counsel to Acrisure in the deal.