Money closes the deal, but finding a partner to make an acquisition or merger work often comes down to feeling comfortable. That comfort level is as important to the acquired firm as it is to the acquirer, especially if the acquisition becomes a long-term partnership.

For Dean Hayes, one of the owners of Banks-Moneyhan-Hayes Insurance Agency in Atlanta, the idea of being acquired was far from his mind until an officer from Main Street Insurance Services Inc.–a subsidiary of Main Street Bank Inc., based in Atlanta–suggested the idea.

“We were not really looking,” said Mr. Hayes. “But the more we talked, the more it made sense. There is strength in numbers. It makes the carriers happy and it gives us volume.”

The agency had been approached by other banks but turned them down because the agency did not feel comfortable with the buyers. What attracted the agency to Main Street, he said, was that the two shared the same work ethic and service culture. It was also important that Main Street agents ran the insurance services department and it is separate from the bank.

“We both brought ideas to the table that the other liked,” he said. “There were some things that we found one does better than the other.”

“It can be a great relationship if everyone is up front and honest about their expectations,” said Mr. Hayes, who is now a vice president with Main Street after completing the deal last year. “It has been great for us and our clients. It has made us a stronger and more viable organization.”

At Roberts Eastland & Persac, an independent agency in Baton Rouge, La., the principal owners–Bill Marks and Jack Persac–were looking for someone to partner with. Their three-agency cluster operations were facing the same issues many independent agents confront today–generating enough volume to keep the carriers happy.

The decision was made to find a larger partner for the future. With the help of a consultant, they began their search. “We were looking for people we could be compatible with,” explained Mr. Persac. “We knew [Arthur J.] Gallagher and respected them.”

“We had a couple of banks and national brokers we spoke with,” said Mr. Marks. “What was different about Gallagher was that they would not give us a price until we flew out to [their headquarters in Itasca, Ill.] to meet with them. We thought it was ridiculous, but when we got there we had a different view.”

After meeting with Pat Gallagher and other executives, the two owners walked away knowing these were people they wanted to do business with.

“Pat Gallagher said he loved to get up in the morning to sell insurance to someone,” said Mr. Marks. “But what was interesting was it looked like all the executives felt the same way. It is the way we run our agency. We came back on the plane and felt they knew what they were doing. They sold us.”

“We felt comfortable with all the people we spoke to,” added Mr. Persac. “We felt Gallagher was the fit for us.”

Mr. Persac and Mr. Marks–both of whom became account executives for Gallagher after completing the deal last year–said that while they ended up having a good experience and receiving access to a lot of resources, they would not have been as successful in their choice if they had not sat down with a consultant before making the move.

“I would not suggest to anyone that they try to do this on their own,” advised Mr. Marks. “That was the best thing we did in the process–it smoothed the way for everything else,” added Mr. Persac.

“The more we talked, the more [acquisition] made sense. There is strength in numbers. It makes the carriers happy and it gives us volume.”

Dean Hayes

Banks-Moneyhan-Hayes Ins. Agency

Special Reports /

Comfort Level Can Make Or Break A Merger

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