Integration work is underway soon at Financial Horizons Inc., after the company announced it is acquiring two additional companies this fall – Performance Financial Services Inc., of Saskatchewan, and Belec & Company Ltd., of Edmonton.Both deals are expected to close in October. Financial Horizons president and CEO, John Hamilton says there are additional letters of intent signed with other companies as well, which have notyet been made public. He expects two of these will also close before the end of 2014.

Prior to making the acquisition announcements, Financial Horizons made several organisational and structural changes that saw Paul Isaacson, pacific region president, assume full responsibility for the company’s entire western region, which now includes the newly-expanded Prairie business.

Stronger presence


While the subsequent acquisitions do give the company a stronger presence in the West – a fact repeated in both announcements – Hamilton says his decision to acquire the two smaller MGAs was made in response to specific opportunity. “It has nothing to do with regions. It has everything to do with opportunity and success. We want companies that are well-run.”

In both cases, Hamilton says he knew the principal decision makers ahead of time. “I’ve known them both for a long time; I know theircharacter. That means an incredible amount to me. I did not know their day-to-day business, but I knew them. That certainly played into it.”

The resulting deals add roughly 700 advisors to Hamilton’s network – 500 from Performance Financial, and about 200 from Belec. Once completed, he says Financial Horizons will beworking with 7,000 to 7,500 advisors in total. Since starting the company with three employees back in 1990, and becoming an MGA in 1999, Hamilton says he’s completed at least 15 similar deals to grow the company.

In looking at other potential acquisitions, Hamilton says he prefers companies that are local, and wellrun, without having stretched themselves across too much geography. Between 300 and 500 advisors is a preferable size, with loyal staff, and low turnover. “They’ve done well for themselves, but they’re looking at succession plans. That’s what we’re looking for.”

He says some of the conditions giving rise to the opportunity to acquire companies, include general demographics – MGA owners are getting older, and need succession plans – regulatoryrequirements that are costly, and increasingly difficult to meet while still maintaining service levels, and sales volume pressure from carriers, as well.

“Our supplier companies are increasing their requirements (for MGAs who want) to retain contracts.It’s much more efficient for them to support, say, 40 MGAs, instead of 140,” he says. “They want a certain amount of volume to keep the contract. The smaller and mid-sized companies are having a harder time validating those contracts. They’re starting to lose them.”

Enhanced advisor services


In announcing the respective deals, both Ken Mossing, president of Performance, and Gerry Belec say product availability, and enhanced advisor services are two of the initial benefits that come from a union with Hamilton’s company. In each case, Financial Horizons is purchasing all company shares in exchange for cash and shares in its parent company, Granite Global Solutions. Following the deal, Mossing will be appointed vice president, reporting to Isaacson. Belec will remain in a consultant role, while his son, Joe Belec, joins the company as business development manager, reporting to vice-president Alex O’Donnell in Alberta.