TRAVERSE CITY — A Boston private equity firm has acquired Traverse City-based High Street Insurance Partners Inc., an insurance brokerage platform company formed in 2018 that has since acquired two-dozen agencies across the U.S.
Abry Partners LLC, which manages $5 billion in capital across its active funds, today announced the High Street Partners acquisition from Huron Capital Partners LLC. Terms of the deal were undisclosed. Detroit-based Huron Capital Partners formed High Street Partners three years ago.
“We have rapidly grown the company and successfully integrated 24 community-focused agencies since forming (High Street) two and a half years ago,” Scott Wick, founder and CEO of High Street Insurance Partners, said in a statement. “Abry will bring additional resources and valuable industry expertise as we continue to pursue add-on acquisitions as part of our strategy to accelerate growth.”
High Street Partners has offices in Michigan, Colorado, Connecticut, Iowa, Maryland, New York, Oregon and Pennsylvania. The firm employs 500 insurance specialists and consultants. High Street Partners just this month announced three acquisitions for agencies in Pennsylvania and New York. Those deals came shortly after acquisitions for agencies in Waterloo, Iowa, and Edwards, Colo.
The deal for High Street furthers Abry Partners’ investment in the insurance sector. Abry Partners in the past has invested in Grand Rapids-based Acrisure LLC, which for years has been the largest acquirer of insurance agencies in the U.S.
“We have been following the High Street story for a number of years and as a result of the trusted partnership we established with High Street’s executive management team ... we developed a go-forward strategy and are now poised to begin working with their entrepreneurial management team to build on their earlier successes to provide innovative solutions to the insurance industry,” said Brent Stone, a partner at Abry. “We are deeply imbedded in the insurance sector and have evaluated numerous platforms, ultimately identifying High Street as a best-in-class operator that has distinguished itself with its experienced and innovative team and its targeted focus on partnering with dynamic growth-oriented agency partners.”
The acquisition comes as deals for insurance brokerage firms and industry consolidation continues, although closed transactions declined to the lowest level in four years at the start of 2021.
Chicago-based Optis Partners LLC, which tracks M&A in the insurance industry, reported 150 agency acquisitions in the first quarter, which compares to 176 in the same period a year earlier and 295 in the prior fourth quarter of 2020.
“The 1-2 punch of pent-up deals from a COVID slow down and a concern over an increase in capital gains tax fueled the well-documented increase in the number of deals in the last quarter of 2020. It appears that the industry needed a breather in Q1 2021 as deal volume declined by nearly 50 percent from 295 to150 transactions, the lowest first quarter volume since 2016,” Optis Partners reported in a recent quarterly report on deal flow.
In 2020, the industry recorded 771 closed transactions, the largest deal flow reported in the decade that Optis partners has been tracking insurance agency M&A.
“Activity in the remainder of 2021 will likely rise, though perhaps not to the level of 2020. The principal driver will be flushing out the remainder of potential sellers that didn’t pull the trigger in 2020 as the expected tax increase should actually take effect in 2022 instead of 2021,” Optis Partners reported.