Mike Bruce on broker M&A speeding up in Covid hit UK

Mike Bruce recently spoke to Insurance Post Magazine about mergers and acquisitions in the broking sector. Whilst the economy has been suffering under the weight of the pandemic, M&A activity in our sector has continued at pace, with a number of significant broker  consolidations announced this year and GRP completing six deals in the last 3 months alone.

Mike picks out some key drivers that have maintained this momentum despite the grim economic backdrop.

From a macro-economic perspective, speculation about the possibility  of reforms to entrepreneurs tax relief and capital gains tax have brought a sense of urgency. As for GRP’s deal flow, Mike points to a focus on in the long term, rather than short term success of acquisitions which means that quality businesses still command a strong valuation. To support this long term view, earn out deals have been adjusted to recognise short term covid related pressures on earnings and allow for longer term claw back.

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