Insurance distributor Integrity Marketing Group announced another acquisition on Wednesday, buying Minnesota-based National Independent Brokers, Inc.
Integrity has bought out firms in Ohio, Connecticut, and Arizona this year, continuing a trajectory that has allowed the company to triple revenue since the middle of 2016. That was when the Dallas-based company brought on capital from private equity firm HGGC, the shop co-founded by NFL Hall-of-Famer Steve Young. (Young now serves as the managing director of Integrity.)
Founded in 2006, Integrity sells insurance—Medicare Advantage and Medicare Supplement—products to senior citizens and the families of senior citizens through a network of independent agents that work on its behalf. I recently hopped on the phone with CEO and co-founder Bryan Adams to hear more about the company and its growth.
Tell me a little bit about what you all do.
We work with insurance companies. We’re not all that well-known to the general public because we’re really the wholesale organization that goes and develops new products with insurance companies and then sells those, with distribution by our independent agents throughout the U.S. We currently have about 130,000 agents who take product through us in various forms or fashion. We work closely with all of the major life and health insurance companies in the U.S. that really want to focus on the senior market, and we’ve developed a lot of the products that are available to the market today.
You took on a private equity investment two years ago. It seems from that point the plan has been to buy, buy, buy. What has been the defined strategy since you took on those funds?
I’m 42. Most of our competitors are older gentleman who started these businesses when they were younger. What happened is two different insurance companies came to us and said they were concerned about some of their aging distribution partners—their aging agency owners—and asked if we would be willing to buy the firms and keep them selling business for those insurance companies. Which we did.
We started getting inundated with requests from a lot of our older peers saying, ‘Hey, I don’t have a succession plan. Would you guys look at partnering with me or buying my business as well?’ We had done a number of transactions during that time and, frankly, had gotten to a capacity for ourselves, me and my partner at the time. We needed to bring on a capital partner who could help address the succession-plan demand in the market.
What has been your approach to this M&A activity?
HGGC really understood our culture, our focus on growth, and ways to really grow this partnership. Integrity is a large partnership—part of our plan is, we don’t just gobble up businesses, we facilitate and take them on and they also become an equity owner—a partner—in Integrity, which allows them to participate in the upside growth of Integrity.
How has your revenue grown with your transactions?
We completed our transaction with HGGC in June 2016, so in the last two years since then, organically and inorganically through our robust acquisitions, we’ve tripled revenue and EBITDA. (Ed. note: Adams declined to provide revenue figures.)
Do you expect to continue buying companies?
We have a pretty good pipeline built out as we speak of other peers in the market that want to join our partnership, so we would expect to continue to do so.
What is your Dallas presence like?
We’re headquartered in Dallas. I’m a Texas guy, and I’m proud to say that we’re here in Texas. This is one of our smaller offices, but it’s all of our key executives. We have about 35 executive-level and support staff positions in Dallas. We expect to grow that over the next year or two to the 70-75 range. Those are some of our highest-paid jobs.
