Baldwin ready to resume acquisitions after hiatus
- May 21, 2025
- Posted by: Web workers
- Category: Workers Comp
The Baldwin Insurance Group Inc. will begin “leaning back into” mergers and acquisitions as it seeks to attain its long-term goal of becoming a Top 10 U.S. broker by 2029, its CEO said.
The brokerage, which completed 35 acquisitions in the two and a half years after its initial public offering in 2019, largely suspended M&A activity after its largest deal, the 2022 purchase of Westwood Insurance Agency for $385 million.
The debt incurred to complete that deal increased Baldwin’s leverage ratio to 5.8 times earnings.
“That was considered quite high for public market investors, and so we spent the next two years deleveraging the business and paying out the earnouts from the M&A we did post-IPO,” CEO Trevor Baldwin said in an interview Tuesday on the sidelines of the William Blair & Co. Investor Conference in Chicago.
The earnout payments, which relate to deferred compensation contingent on performance, will be completed by the end of the second quarter, he said.
“We’ll have clear line of sight to leverage being back under four in the near term, which gives us the financial flexibility to begin leaning back into M&A in a thoughtful manner,” Mr. Baldwin said.
Baldwin announced its “Top 10 in 10” strategy when it launched its IPO in 2019. It was 44th on Business Insurance’s ranking of the Top 100 largest brokers of U.S. business in 2019 and 16th last year, with $1.22 billion in 2023 brokerage revenue. The company projects $1.42 billion in brokerage revenue for 2025, according to its investor presentation. Last year, the 10th largest broker reported $2.65 billion in brokerage revenue.
The brokerage expects to reach its goal through continued strong organic growth – it was 17% in 2024 – and via acquisitions, which will typically involve buying brokers with $15 million or more in revenue, Mr. Balwin said.
“It’s definitely a softer M&A environment than it was two or three years ago. With that being said, I think multiples are still relatively high for really high-quality businesses,” he said.
