What the Broker Roll-Up Means for Your $40M Agency
PE-backed buyers acquired 471 U.S. insurance brokerages in 11 months of 2025 at 12-14x EBITDA. The three paths for a $40M agency. And the binding constraint.
TL;DR. Private equity-backed buyers acquired 471 of 649 announced U.S. insurance brokerage M&A deals in the first eleven months of 2025, the same 70%-plus share that has held since 2022. Mid-market brokers with $1-10M EBITDA are clearing 11.4-14x EBITDA, more than double 2020 multiples. The three paths for a $40M agency are sell at the top, build the platform, or stay independent and bet on operational AI to compete on margin. The acquirers are paying these multiples because they can extract 200-400 bps of margin in 18 months through ops consolidation, and that is the lever that decides which path actually wins.
You are a managing partner at a $40M property-casualty brokerage in Cleveland, or a $60M employee benefits practice in Charlotte, and three things happened in the last six months. A regional rep from a PE-backed consolidator pitched you at 12x trailing EBITDA, suggesting a Q4 close. A competitor down the street announced they sold to Hub International or Acrisure. And your senior partner, the one who is 59 and built half the book, asked about your succession plan over lunch.
This is the broker roll-up cycle reaching its peak, and you are now inside it whether you wanted to be or not.
The numbers behind the offer
MarshBerry counted 847 announced U.S. insurance brokerage M&A transactions in 2024, up 5% from 2023. By November 25, 2025, 649 more had closed, with private capital-backed buyers responsible for 471 of them (72.6%). Optis Partners pegs 2025 full-year volume at 695 deals, with PE and PE-hybrid buyers accounting for 73% of deal count and 69% of deal value.
The headline transactions tell the broader story. AON paid roughly $13 billion for NFP in 2024. Marsh McLennan Agencies acquired McGriff Insurance Services for $7.75 billion that November. Arthur J. Gallagher closed AssuredPartners at $13.45 billion in January 2025. Brown & Brown bought Accession Risk Management (Risk Strategies and One80 Intermediaries) for $1.7 billion later in 2025. Highstreet Insurance Partners raised $550 million of fresh growth capital in August 2025, expressly earmarked for more acquisitions.
The mid-market is the supply side of those headlines. Hub International acquired Dansig in Decatur, Illinois (April 2025), Allegiant Global Partners in Boston (May 2025), and Jackson Hole Insurance in Wyoming (December 2024). Higginbotham, the Fort Worth roll-up, completed 13 deals in 2023 and four more by April 2024. Acrisure has executed 57 acquisitions since inception and bought Tulco's AI business in February 2026 to plug operational AI into the rest of the platform.
According to Sica | Fletcher's H1 2025 valuation data, deals with at least $1M EBITDA averaged 11.8x EBITDA, essentially flat against 2024's 11.9x. Mid-market brokers with $1-3M EBITDA are seeing 11.4-11.8x. Brokers in the $3-10M EBITDA band, which is roughly where most $40-100M revenue agencies land, are clearing 12-14x. Public brokers trade at 16-18x. Multiples have nearly doubled since 2020 (9.4x).
These are the numbers your senior partner saw at lunch.
Three strategic paths
The exit conversation usually reduces to three options, and most $40-80M brokerages will pick one of them in the next 24 months.
Path one: sell at the top
The simplest path. You take a 12-13x EBITDA offer from a PE-backed consolidator, roll some equity into the platform, and harvest the rest as cash. Hub International, BroadStreet Partners, Inszone, and Acrisure are all writing this check today.
The case for selling now is that you are inside a peak multiple environment. Optis flagged 2025 deal counts down 12% from 2024 even as PE share climbed, suggesting the rationing of sellers more than a softening of demand. If multiples compress with rates or with the next sector cycle, the difference between selling at 13x and selling at 9x on a $5M EBITDA book is $20M of enterprise value. That is the senior partner's house and your kid's college, twice over.
The case against is that the rollover equity is often worth more than the cash if the platform actually executes its consolidation thesis, and the average mid-market broker has very little visibility into whether the acquirer can pull that off.
Path two: build the platform
A small number of $40-80M brokerages are choosing to become the acquirer instead of the target. The model: raise $50-150M of capital, buy 5-10 small agencies in the next 24 months, hit $100M-plus in revenue, then sell up to a national consolidator at a platform multiple (14-16x) instead of a tuck-in multiple (11-12x).
Higginbotham did this for two decades before reaching its current scale. Highstreet Insurance Partners is doing it now with Ares Capital, Abry, and Acrisure as capital partners. Inszone went from a regional California broker to a top-three U.S. acquirer in five years.
This path requires deal flow, an integration playbook, and a back-office that can absorb agencies without churning their books. Most $40M brokerages have none of those three things at the start. The capital is the easy part.
Path three: stay independent and run AI on margin
The third path is the one most operators dismiss too quickly. Stay independent, do not raise PE capital, and bet that operational AI compresses costs faster than PE-backed competitors can extract margin post-acquisition.
This is the bet that the next wave of brokerage value creation is not consolidation-driven but margin-driven. A $50M brokerage running 18-22% EBITDA margins today can plausibly reach 28-32% by 2028 if AI agents take material work out of certificate of insurance processing, renewal triage, carrier appetite matching, claims handoffs, and submission workflows. That margin lift, in a 12x EBITDA world, is worth more than rolling up smaller agencies and reselling.
The path requires investment, executive focus, and a stomach for the gap between what AI can do today and what consolidators will be able to do by 2027. It is not the safe choice. But it is the one path where the operator captures most of the upside.
The binding constraint
Here is the lever underneath all three paths.
PE buyers are not paying 12x because brokers are scarce. They are paying 12x because they can extract 200-400 bps of EBITDA margin in 18 months through operational consolidation. Acrisure's acquisition of Tulco's AI business in February 2026 made this explicit, and Capstone Partners' June 2025 sector update confirmed that Insurance Distribution carries the highest EV/EBITDA multiples in financial services (16.7x for 2022 through YTD 2025) precisely because of this margin compression thesis.
The constraint is not capital. The constraint is operational margin extraction, and whoever does it first wins.
If you sell to a PE-backed consolidator, you are betting they extract that margin better than you would have. If you build a platform, you are betting you can extract it before the strategics buy you. If you stay independent, you are betting you can extract it at all, against incumbent technology debt and without the consolidator's playbook.
There is no fourth path that does not depend on this question. A $40M brokerage that ignores operational AI for the next 18 months is not staying independent. It is becoming the next acquisition target at a discount, because the buyer will price in the work the seller failed to do.
What to do in the next 90 days
Three things, regardless of which path you choose.
First, get an honest read on your current EBITDA margin and the top three operational drags pulling it down. For most mid-market brokerages, the answer is some combination of submission rework, carrier appetite confusion, certificate processing volume, and renewal triage. Quantify the hours.
Second, talk to two of your competitors who sold recently. Ask them what the rollover equity is actually worth eighteen months in, and what the acquirer changed about their book that they did not expect. The gap between the deal pitch and the operating reality is the most underpriced data in this market.
Third, run a 90-day pilot on one of those operational drags with an outside AI partner. Pick the drag that hits margin fastest, not the one that is easiest to demo. If the pilot moves a measurable number, you have evidence of operational lift independent of the consolidation question. If it does not, you have a clearer picture of why the platform buyers are paying what they are paying.
FAQ
What EBITDA multiple should a $40M brokerage expect from a PE-backed buyer in 2026? For deals at $1-3M EBITDA, expect 11.4-11.8x EBITDAC (commission-adjusted). For deals at $3-10M EBITDA, expect 12-14x. Public broker comps trade at 16-18x, but those multiples do not pass through to mid-market sellers. Adjust down a turn or two for tail-end concentrations, single-carrier exposure, or non-renewing books.
Is it too late to build a platform? No, but the window is closing. Capital is still flowing to platform builders (see Highstreet's $550M raise in August 2025), but the supply of tuck-in targets is tightening as PE-backed consolidators continue to absorb the universe. Platform builders starting today need a 24-month plan to $100M, not a five-year plan.
How much margin can operational AI actually move on a $50M brokerage? Realistic 18-month range is 200-400 bps of EBITDA, concentrated in certificate of insurance processing, submission workflows, carrier appetite matching, and renewal triage. The high end requires real change management, not just tool deployment. Brokerages that treat AI as an IT project get the low end. Brokerages that treat AI as an operational program get the high end.
What does PE actually do post-acquisition that we could not do ourselves? Three things, primarily: capital efficiency (better debt terms, shared treasury), cross-sell mechanics (carrier relationships, specialty pods), and back-office consolidation (claims, certificates, accounting, IT). The cross-sell and back-office moves are increasingly automatable by mid-market operators directly. The capital efficiency is not.
Will the roll-up cycle keep going? Probably through 2027, then slow as the universe of acquirable targets thins. MarshBerry expects 2026 to track ahead of 2025 on a per-buyer basis even with fewer total deals. The bigger inflection is when the largest PE platforms begin to exit to strategics (the AON / NFP and Gallagher / AssuredPartners deals were both PE-platform exits). That handoff phase determines whether multiples hold or compress.
How we think about this
We spent the last year embedded with $40-80M brokerages building exactly the operational stack underneath these decisions: certificate of insurance workflows, carrier appetite intake, renewal triage agents, submission packagers. The brokerages that will thrive in this consolidation cycle are not necessarily the ones who sell at the top. They are the ones who run their book like the platform plans to once they buy it. If you want 30 minutes on what that looks like for your firm, book a discovery call with us. We work fixed-price in four weeks, and we have done this in three of the seven mid-market verticals we serve.
Keep Reading
- Why PE Can't Buy Your Law Firm (But Owns Everything Else) : How PE has rolled up adjacent professional services and where regulatory walls actually hold the line.
- How $50M Brokerages Cut Quote-to-Bind From 5 Days to 1 : The operational workflow that turns the AI margin thesis from theory into measurable cycle-time gains.