Fast-growing insurance brokerage firm Confie is reportedly on the sales block.
Talk of a sale initially cropped up in a recent Reuters news report, which indicated that Confie’s current private equity owner, ABRY Partners, is exploring a deal involving terms that could value the company at about $1.6 billion.
ABRY and Confie were not available for comment last week.
Huntington Beach-based Confie, which specializes in serving the Latino-American population, has grown substantially over the past few years, in large part by acquisitions of smaller brokerage firms throughout the U.S.
Confie was founded in 2008 with $75 million in funding from Genstar Capital LLC to be “a platform company to consolidate insurance brokerages,” according to the San Francisco-based private equity firm.
Confie made about 40 acquisitions over its first five years in business and expanded to about 300 branch locations in nine states, reaching $200 million in revenue.
Acquisitions have continued, and its portfolio of brokerages now has annual revenue of more than $470 million and more than 670 retail locations across 17 states.
Genstar sold its majority equity interest in Confie to Boston-based ABRY in late 2012. Terms of the deal weren’t disclosed.
ABRY typically invests in later-stage companies that are profitable, according to its website, which also says the firm looks to generate returns on its investments over a period of three to seven years.
The Business Journal highlighted Confie and its then-president, Mordy Rothberg, in January, naming him the “Business Person of the Year” in the finance category for his work in leading the company through numerous deals and continued growth in 2014.
Rothberg, who since then has taken the chairman’s title, told the Business Journal at the time of the profile that the company is on pace to reach $700 million in revenue and more than 2,000 locations over the next five years.
The insurance industry has seen active consolidation among brokerages in recent years involving strategic and private-equity-driven buys.
Recent local deals include a “significant equity investment” from Stone Point Capital LLC in Alliant Insurance Services Inc. in Newport Beach. The June deal gave the Greenwich, Conn.-based private equity firm the biggest ownership stake in Alliant, which is one of the largest insurance brokerage firms in the U.S. and the biggest among those headquartered in Orange County.
New York-based Kohlberg Kravis Roberts & Co. had been the biggest shareholder of Alliant since 2012, when it purchased the brokerage from Blackstone Group LP. KKR remained a shareholder in Alliant after the Stone Point deal.
An insurance industry outlook report from Deloitte earlier this year indicates private equity firms “continue to be interested in insurance sector investments,” explaining that the investment firms historically “have focused on the brokerage/agent segment, attracted by its cash-flow-based business model and the ability to quickly enter and exit the market.”
The report adds that some private equity firms, “especially in the broker space, are cashing out of investments they made a few years ago.”
It also names Confie as an example of companies with private equity backing that “continue to be very aggressive in certain insurance segments.”
