WR Berkley abandons sale of Breckenridge

WR Berkley has abandoned a sale of wholesale brokerage subsidiary Breckenridge Insurance Group, The Insurance Insider can reveal.

The Connecticut-based carrier had been auditioning banks for guidance on how to sell all or parts of Breckenridge.

Last year Breckenridge CEO Tracey Carragher attempted to orchestrate a management buyout with firms including mid-market MGA and wholesalers Risk Placement Services and Worldwide Facilities, but was ultimately unsuccessful, according to market sources.

Industry sources say Breckenridge sought an approximately $50-60mn valuation on $5mn current proforma Ebidta with market multiples of 10-12x.

However, market contacts said that players felt Breckenridge was priced too highly. The operation was also regarded as something of a mixed bag of businesses making it less compelling to some brokerage consolidators.

It is thought that specialty insurer WR Berkley, which writes more than $6.2bn in annual premiums, was looking to divest the Breckenridge platform as it is regarded a non-core part of the company.

The business encompasses the wholesale commercial brokerage Breckenridge Insurance Services, specialty program administrator Blue River Underwriters, insurance provider OSC Insurance Services, specialty division InSpecialty and program administration association Target Markets.

Breckenridge Insurance Group was founded in 2009 and acquired International Placement Services, a wholesale brokerage founded by Richard Eichhorn, a year later.

Breckenridge has offices in St Louis, Missouri; Chicago, Illinois; Atlanta, Georgia; and Irvine, California, as well as other US cities.

The failed sale effort comes despite a white-hot market for insurance broker M&A. Recent active sales processes include Dallas-based US Risk, while SouthWest Risk parent ClearView Risk Holdings sold to PE-backed Amynta.

This publication also revealed US retail broker AssuredPartners will launch an auction later this quarter as private equity backer Apax looks to realise its gains.

Valuations have been relatively robust and have held up strong, although there appears to be some pull back from the higher end of the range, particularly for what are regarded lower quality assets.

WR Berkley and Worldwide Facilities declined comment. Risk Placement Services could not be reached for comment.

An earlier version of this article incorrectly stated that US Risk had been sold. We would like to clarify that this is not the case, but that it has been running an auction process.