Mergermarket: Trucordia Refines M&A Strategy

Trucordia has taken a more strategic approach to insurance brokerage consolidation in the last year as it organizes acquisitions onto platforms and focuses more on quality, said Brooke DeWyze, chief development officer.

The Lindon, Utah-headquartered insurance distributor closed 22 deals in 2024, down from a recent high of nearly 100 in 2022 when it was operating under the brand PCF Insurance Services. DeWyze said Trucordia placed more emphasis on business alignment and sustainable growth than deal count, which it had projected at around 50 for 2024.

It looked at more deals last year than ever but was more selective in making offers, DeWyze said. Revenue has grown to nearly USD 900m, with EBITDA of about USD 400m, she said. Its valuation was USD 4.9bn at the end of 2023, a number the firm declined to update. Trucordia prefers targets in the ballpark of USD 20m in EBITDA though is willing to look at smaller targets if it can bolt them onto a network of platforms that Trucordia has established, DeWyze said.

The company has established a national platform for health and benefits and regional platforms for its other insurance services in the Northwest, West, Southwest, Midwest, Northeast, and South, she said.

Trucordia is keen to grow its business in healthcare, health and benefits, and transportation, the executive said.

Target geographies include the North Carolina Research Triangle and Nashville as well as the Midwest, Mountain West and West, DeWyze said. Valuations for brokers have been around 9x-11x EBITDA, but that range has ticked upward “a turn or two” due to market competition and private equity deployments, she said.

Trucordia is building for longevity and value, the latter of which holds up better with an integrated business model, DeWyze said. The firm’s new platform organization makes integration easier and enhances customer services, she said. 

Management and partners own a majority of shares, while HGGC, Carlyle, Crescent Capital, and Owl Rock back the brokerage with minority stakes. Trucordia’s leadership is positioning the company to have exit optionality, which could be a strategic sale, further private equity investment or a public listing, DeWyze said.

The company operates out of more than 275 locations in 40 states.

Orrick and Skadden Arps provide legal services. BDO provides accounting services, and JPMorgan Chase provides commercial banking.

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