"It's common to see first quarter M&A transactions fall significantly from the [fourth] quarter of the prior year as inventory shrinks and deal teams take a pause," said OPTIS Partners in the report. The 149 recorded transactions were a 14% decrease from the same quarter in 2021 and a 7% decrease from the five-year average.
According to the report, historical data suggests that the remainder of 2022 will see an increase in M&A deals, "and conversations with a number of buyers show that will be true as many are reporting double digit number of LOIs [letters of intent] in hand going into the Q2."
This report expanded the deals tracked by OPTIS Partners to include transactions in life insurance, financial services and wealth management, title insurance, insurtech ventures, and other industries. According to the report, this is due to a shift in buyer appetite that extends beyond the property/casualty and employee benefits markets.
After accounting for the 26 transactions involving the additional group of sellers, there were a total of 123 transactions. Using OPTIS Partners' previous reporting criteria of solely P/C and employee benefits firms, this represented a 17% decrease.
The activity from the ten most active acquires was mixed. Acrisure led all buyers with 14 transactions in the third quarter, up from nine in the same period in 2021. Acrisure was followed by Hub, who had 12 transactions. Meanwhile, AssuredPartners and Alera announced no new deals to begin the year, and OneDigital announced only one.
Inszone had ten transactions in the first quarter, and High Street Partners had nine.
Private equity and hybrid deals continued to dominate M&A activity, accounting for 70% of all announced transactions in the first quarter. This was roughly in line with transactions in the first quarter of 2021 (65%) and the trailing 12-months ending in March (78 percent ).
Private equity investors made one announced investment, with Peloton Risk Advisors making a significant minority investment in Unison, the combined business of Oswald Companies and RCMD.