Are you looking to sell or are you looking to grow? That’s the fundamental question an agency owner needs to ask themselves before going to market. There are as many flavors of buyers as there are sellers.
Agency owners deserve credit for the incredible value they have created, often over generations, and it is their asset to monetize. In addition to creating considerable value for themselves by delivering a market differentiated risk solution, developing and servicing accounts with a client first mentality, they have also provided employment opportunities and leadership in their communities.
When it comes time to monetize their asset, they have a bevy of options and many elect to maximize the value by exiting through a full sale. There are many buyers for this type of transaction, and agencies seeking this path would naturally self-select out of our Platform Partnership model. While we acquire a majority stake in our agency partners, we provide Platform Partners with retained ownership to incentivize their leadership to leverage our scale and resources to grow their business faster than before.
Our goal is to provide the framework to empower the entrepreneurial spirit and, most importantly, invest in what you will do, not just what you have done. We further empower our Platform Partners by combining retained ownership with Connected Autonomy – the combination of which creates shared growth and economics and targets a very specific profile of sellers.
We have boiled it down to two types of ideal partners. The first is the agency owner looking for a strategic partner, and the second is the agency owner that needs to solve perpetuation and has the talent but can’t make the math work on an internal perpetuation.
The first profile: the Strategic Partner, fits like a glove. These agency owners have a long runway and have made the calculation and concluded that in order to achieve their ambitions, they need a partner. They tend to be looking for more than just the financial commitment of a traditional buyer. They value the scale and resources aimed at growth that a strategic partnership with KAP affords.
The industry consolidation, fierce competition for talent, constant technological evolution, historically high valuations, and dozens of buyers in the space all make going it alone more difficult than ever. Whether their goals are to grow organically or supplement their growth strategy through acquisitions, being part of KAP will accelerate and de-risk that path.
The second profile: the Perpetuation Planner, can also be an ideal fit for the KAP model. This owner has built a great firm and identified the next wave of leadership but in many ways has simply become a victim of their own success. An agency’s success and the cost of perpetuation are perfectly correlated.
This reality ultimately manifests itself in the form of a sale because the future leaders have neither the access to capital nor the appetite to acquire the ownership at an external value. The exiting ownership has the options to either sell externally or take a substantial discount and/or seller finance the perpetuation. In this scenario, KAP can enable the existing ownership to take chips off the table at the historic prices, while leaving meaningful equity at the agency level to perpetuate. From there, we are committed to ensuring the next generation is poised to build on the stable foundation laid by the former owners with our support to achieve expansive growth.
Regardless of the profile, KAP has, and continues to invest in, the tools, resources, expertise, capabilities, and experience to take your agency to the next level. By leveraging the strength of the KAP corporate team, as well as the best practices of our extremely collaborative platform of high performing agencies, we are dedicated to enabling your success.
The best part, through our retained ownership and Connected Autonomy model you remain locally owned, benefit from the scale and resources of a national platform and share in the economic upside of that success.