In today's hypercompetitive agency-acquisition marketplace, with its overabundance of buyers and shortage of high-quality sellers, it has been getting harder for acquirers of all types and sizes to get deals done. But the buyer group that has been challenged the most has been privately-held agencies, since they lack the financial resources necessary to compete with the publicly-traded brokers and banks for acquisitions.
A look at recent Best Practices Studies reveals a trend that has frustrated many of the industry's top performers over the past few years--acquisitions are getting smaller and contributing less to agencies' overall growth than they used to.
Comparing the Best Practices statistics from the 2003 through 2005 studies, we find that over that two-year span, the average deal size dropped by 83 percent--from $3.6 million to $0.6 million.
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