Quality of Earnings for Insurance Brokerage Independent Sponsors
When the deal is insurance brokerage and the question is Quality of Earnings, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Quality of Earnings on insurance brokerage deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.
The typical insurance brokerage platform sits at $10M to $150M EV with EBITDA in the $3M to $25M range. The thesis runs on regional retail agency roll-ups. Producer non-competes are unenforceable in too many states to ignore. Plan retention, not litigation.
How Quality of Earnings actually gets structured.
Engage QofE within five business days of LOI signing.
Scope to include working capital normalization, deferred revenue, and customer concentration.
Share preliminary findings with the seller before final report, to surface disputes early.
Coordinate QofE findings into both the purchase agreement and the LP commitment package.
In insurance brokerage, layer in E&O tail insurance priced and bound as part of the Quality of Earnings workstream.
Treating QofE as a back-office exercise. It is the basis for the price, the working capital peg, and the LP pitch.
"The QofE is the deal book. Read it twice before you negotiate anything."Jason Powell · Quality of Earnings
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
Related deal pages.
Independent Sponsor Economics for Insurance Brokerage
The package of deal-by-deal carry, management fees, and transaction fees that compensates the independent spo…
Management Fee Structuring for Insurance Brokerage
The annual fee paid by the deal entity to the independent sponsor for ongoing oversight, board service, and p…
Transaction Fee Structuring for Insurance Brokerage
The fee paid at closing to the independent sponsor for sourcing, structuring, and closing the platform deal a…
Equity Rollover for Insurance Brokerage
The portion of seller proceeds reinvested into the post-close entity, aligning seller with buyer.
Quality of Earnings for Healthcare Services
roll-up of physician practices and ancillary service lines
Quality of Earnings for Home Services
regional roll-ups of HVAC, plumbing, and electrical operators
An LOI on the desk, a insurance brokerage target, and a Quality of Earnings question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.