Partnering with expertise: A smooth acquisition

Agency Banking 

The background: 

Each year, thousands of mergers and acquisitions (M&As) occur in America. M&As are utilized to consolidate companies or assets, stimulate growth, gain competitive advantages, and increase market share. 

In 2016, United Group Alliance, an alliance of local independent partners taking advantage of significant income opportunities and market stability, wanted to make a strategic business acquisition that would add value to their current offerings and expand its entities. 

The challenge:

According to Harvard Business Review, “between 70 and 90 percent of mergers and acquisitions fail.” No two deals are the same, but the typical reasons M&As fail are:

  • A misevaluation resulting in overpayments 
  • A lack of future cash flow
  • Negotiation errors

“Because our entities operate separately and individually, we were mostly concerned with cash flow,” says Steve Hopkins, President, United Group Alliance. “We needed to ensure the entity we wanted to acquire had enough funding to immediately support itself.”

The completion of a successful merger or acquisition involving insurance agencies also requires a specialized understanding of the insurance industry. 

Hopkins adds, “Insurance agencies, like ours, have their own set of regulations, rules, and maintain liabilities that may be difficult to value. This often requires in-depth knowledge of the insurance industry to successfully facilitate an acquisition.”

Our solution:

Working with United Group Alliance throughout their acquisition, Westfield Bank’s team efficiently and effectively customized acquisition financing terms that empowered United Group Alliance with the required capital as they embark on their journey of growth. The acquisition financing provided 100 percent of the required capital as well as additional funds to address United Group Alliance’s concern with the initial cash flow of the entity.

“Westfield Bank’s familiarity with the insurance industry is very powerful because it’s a unique industry with unique needs. For United Group Alliance, being in the insurance agency business, dealing with a bank that knows and understands the insurance industry is extremely valuable during any acquisition activity,” says Hopkins.

Westfield Bank’s team specializes in loans for insurance agencies, working solely with insurance agents. We’re uniquely equipped to empower your agency with working capital as you achieve new milestones. Working with you throughout your agency’s acquisition, merger, or perpetuation, our team of dedicated bankers is here to keep you moving forward.

Let’s advance your firm through acquisitions, perpetuation, and mergers.

Article resources

Martin, R., Clayton M. Christensen, R., Ghemawat, P., & Colvin, L. (2016, May 16). M&A: The One Thing You Need to Get Right. Retrieved September 22, 2020, from