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Published in Economic Development

Lighthouse Group acquired by Illinois independent insurance firm

BY Wednesday, December 02, 2020 01:19pm

GRAND RAPIDS — Insurance and employee benefits agency Lighthouse Group has been acquired by Alera Group, a Deerfield, Ill.-based independent insurance firm that has more than 90 locations across the U.S.

Joining Alera Group “will open avenues for growth like never before, both for our clients and our firm,” said Tom Helmstetter, group president and CEO of Grand Rapids-based Lighthouse, which has eight offices in Michigan.

Tom Helmstetter, group president and CEO of Lighthouse COURTESY PHOTO

“Alera Group is a powerhouse — they are growing by leaps and bounds based on their national capabilities and we are excited to become a part of that positive momentum. Many of our key partners have come from previous acquisitions and I am confident this will be a positive partnership for our clients and our employees,” Helmstetter said in an announcement on the deal.

Terms of the deal were undisclosed.

Alera Group CEO Alan Levitz called Lighthouse “an exciting addition” to the firm.

“There is a very natural cultural fit between our two collaborative organizations and an opportunity for Lighthouse to leverage Alera’s national platform for the benefit of their clients,” Levitz said.

Alera Group has more than 2,000 employees and thousands of clients for employee benefits, property and casualty coverage, and retirement and wealth management services.

Lighthouse Group staff “will continue serving clients in their existing roles, supported by Alera Group’s national resources and team,” according to the announcement. Strategic consulting and M&A advisory firm MarshBerry Capital Inc. in Woodmere, Ohio, served as financial advisor to Lighthouse Group in the transaction.

With the deal, Lighthouse Group joins a lengthy list of independent insurance brokerages that have been acquired by a larger firm as the industry continues to consolidate.

Chicago-based Optis Partners LLC, which tracks M&A in the industry, counted 466 transactions in the U.S. through the third quarter, a decline from the 499 deals in the first nine months of 2019 that reflects a disruption in deal flow from the COVID-19 pandemic.

M&A activity totaled 170 deals in the third quarter alone, virtually equal to the 171 mergers in the same period a year earlier, according to Optis Partners.

After the 25 percent decline in the second quarter, Optis Partners expects deal flow to remain strong into 2021. Activity in the present fourth quarter “will likely be accelerated as many sellers push to close before year end as a hedge against a possible increase in capital gains tax in 2021,” according to Optis Partners.

“The slowdown in deal activity in the second quarter was noticeable, but one would not think the world was wrestling with a pandemic based on both third quarter volume and year-to-date 2020 total deals completed,” Optis Partners wrote in its quarterly report on deal flow. “Many pundits erroneously anticipated a slow-down in M&A activity to have continued into the third quarter and possibly beyond. It did not happen. M&A activity should continue unabated due to the increasing supply of capital chasing a still very large inventory of sellers.”

Grand Rapids-based Acrisure LLC — as it has for years — leads the industry as the most active acquirer. Acrisure through the third quarter closed 69 acquisitions. The firm closed 98 in 2019 and 423 total from 2016 to the end of this year’s third quarter, according to Optis Partners.

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