Following the acquisition of Wilson Albers & Co., Alera Group continues its fast-paced rollup of insurance and benefit brokers.

Formed just a year ago 2017 through a merger of 24 independent employee benefit, P&C and risk and wealth management firms, Alera Group CEO Alan Levitz said the company is in discussions with 40 more firms with revenue ranging from $2 million to $40 million.

Since January, in addition to Wilson Albers, the company has acquired P&C insurer FIRM, insurance and benefits firm Spring Consulting, insurance broker Aisling, Davidson Benefit Planning and HR Benefit Advisors. Alera did not disclose details of these or any of its acquisitions, but states 75% of the acquired firms focus on employee benefits, 20% on P&C and 5% on wealth management, according Levitz.

Alera’s footprint now covers 17 states and the firm serves more than 20,000 clients.

Mergers and acquisitions are nothing new in the employee benefits space — 2017 saw a 90% increase in M&As among benefit brokers from 2016, according to findings from OPTIS Partners. Still, the speed at which Alera is moving is impressive.

While it may Levitz is looking to create one of the top employee benefit brokerages, he says that’s not the case.

“We do not focus on lists and where we appear on a given list. The end game is captured in our desire to go beyond the initial launch and work collaboratively to build a great company. Prior to our launch, there was a belief that we could better serve our clients together than we could on our own and that we could better leverage resources and ideas if we did it as a group,” Levitz says.

“As Alera Group grows, our goal is to continue to attract like-minded firms, expanding our resources and knowledge base in order to better serve clients,” he says.

Despite this wave of acquisitions, Alera failed to break the top four list of insurance and benefit brokers growing by acquisition in 2017. The top overall buyers last year were Acrisure, with 92 acquisitions; followed by HUB International with 49; Broadstreet Partners with 32; and Gallagher with 30. By way of comparison, Accrisure and HUB international have announced one new acquisition a piece this year, Gallagher has announced two, and Broadstreet has not announced a new acquisition.


A seller’s market

What is behind Alera’s push for new acquisitions? Fueled by funding from Genstar Capital, a San Francisco-based private equity firm, the company is taking advantage of a benefit advisory market experiencing high valuations coupled with retiring leadership. In short, the baby boomers want to cash out and the younger millennials in the space do not have the capital to buy their businesses.

“That continues to be a compelling reason with the need to perpetuate their firms and not having the candidates internally to perpetuate them. The multiples that the buyers are paying are just too compelling for some,” says Wayne Walkotten, executive vice president of MarshBerry, a woodmere, OH-based M&A advisory firm that has consulted on Alera’s deals.

“They want to know, ‘What's my firm worth?’ when they hear about other firms selling,” says Walkotten. “They don't want to be left behind.”

Both Alera Group and MarshBerry declined to reveal how much GenStar has invested in Alera.


What’s in it for my firm?

For Karin Landry, managing partner of Spring Consulting Group, selling her Boston-based employee benefit brokerage was a no-brainer. While she was not necessarily looking to sell, she and her two partners who cofounded the firm in 2004 had been approached by a number of other employee benefit firms to discuss possible mergers. She says they chose to sell to Alera for access to “its scope and scale of its 40 or so offices,” as well its expertise, technology and compliance offerings.

“We have complementary skill sets [with Alera] and we have a broad base of employee benefits and Fortune 100 accounts, so we had some unique attributes. We were attractive to Alera in general,” says Landry.

Negotiations with Alera Group started before Christmas in 2017, closed in late January and the sale was announced in early February for an undisclosed sum. She adds that her firm will keep its original name but add a tag line: “An Alera Group Company.” She will keep her staff of 30 full-time advisers and support staff.

Newly acquired advisers have access to Alera’s resources and expertise. For example, the ability to offer P&C and wealth management services from employee benefit firms that did not do so previously — and vice versa. Compliance tools, consulting services and access to third-party technology are other compelling reasons for the partnership, he says.

Often referrals for new adviser firms to purchase come from recently acquired Alera Group entities. “The greatest number of our acquisitions is coming from our partners referring people that they know, so the culture fit becomes much easier. They already know and like these people,” says Levitz.

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