Seeking capital.
Our main company is a software tool used by commercial property insurance adjusters to more easily identify, inventory and get values on commercial and industrial machinery and equipment for various industries. We are better, faster and cheaper/add more value than the traditional analog methods. However, we wanted to share part of our thesis on an acquisitions strategy. We like the idea of providing a platform for owners that want to take chips off the table but still be involved without the headaches of running a firm. The recent M&A landscape was tough due to a Seller's market as the large insurance claims services players continued their quest to get larger and target commercial adjusting & forensic engineering firms. With interest rates rising the torrid pace has slowed and valuations have held steady. There are not many regional mid-tier targets left (btw $10-20 million in revenue). Maybe like 20. The rest of the playing field looks like $1-5 million revenue companies. Ex. McLarens, $250 million in revenue, as a seller at the upper end and a banker mentioned a handful of smaller firms he knew that previously expressed interest in selling. We have a database of about 500 companies in the commercial property claims management space. We suspect most fall in that $1-5 million camp that are too small and would cause too much brain damage. That said, this is a logical place to mine for commercial adjusting & forensic engineering firms that need to have a material amount of claims volume and have a secure place on carriers preferred vendor lists with ability to grow further, for us to consider. We think forensics engineering firms (with specific expertise like construction defect) with material amounts of claims is also a logical target. If we are going downstream, we will need to start with expertise as a differentiator. Then we can fill out the other service offerings to further compete and differentiate by salting in building & equipment consultants, salvors, direct repair networks (use of wearables opportunity), maybe large defense attorney groups (subro), restoration contractors, content services companies etc. A mid-market firm with a full site of tech enabled expertise/service combined with high touch service will win the day. Our big worriment is inertia; where talent, technology adoption & efficiency, professionalism etc are not valued (or actively spiked) and will not move the needle if applied to a slow moving, entrenched industry that is still relationship driven. These perceived risks are also opportunities in disguise (or out in plain sight). And there are plenty of opportunities in this space. We spoke to a 20 years plus claims manager and the strong trend continues towards outsourcing of claims adjustment by carriers of all sizes. Also spoke to our PE acquaintances. There is no secret sauce involved. However, they reinforced the notion of there is opportunity all over this end of the spectrum if you are willing and able. We have found a current opportunity we want to pursue.

Business Services
East Coast
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