Synex Business Performance has penetrated the P&C insurance market outside Quebec by making its largest acquisition ever.

CEO Yan Charbonneau announced that he has purchased GoToInsure, a group of firms that serves the Atlantic provinces. The group has a premium volume of $85 million in 19 branches. This transaction brings Synex’s total volume of P&C insurance to $285 million.

Charbonneau is not the only player involved in the acquisition: It is a joint deal with Jeff LeGrow of Cal LeGrow Insurance & Financial Group. This companybelongs to the Canadian Broker Network, of which Synex is the acquisition arm. The two firms will be equal shareholders in GoToInsure, but Synex will manage the group.

A different profile  

Up to now, Synex’s acquisitions had mainly been in commercial lines. In fact, GoToInsure generates 70% of its volume from personal lines. The independent firm's three main insurers are Intact Insurance, RSA Canada and Wawanesa.

“Outside Quebec, I am much more eager to acquire personal lines volume. Premiums are higher there than in Quebec. This affects portfolios’ profitability. Synex cannot rely on commercial lines alone to achieve its size objective. In addition, joining forces with Cal LeGrow Insurance gives us business muscle of $345 million in Eastern Canada. We will be able to build on that,” Charbonneau told Insurance Portal.

The synergies are already there, he continues, because GoToInsure has a similar model to Synex. In fact, firms in the Atlantic provinces have joined together to boost their clout.

Story behind the sale 

How did the opportunity to acquire GoToInsure come about? The firm was for sale, Charbonneau says. Denis Moisan of FAGA Solutions, who had previously helped Synex acquire Couture Rochette, put the two firms in touch.

GoToInsure was chaired by John Stevens. The other shareholders were Denis Daigle, Jay Kimball and Steven White.

“This independent firm wanted another independent firm to acquire it. In the East, there are no large active consolidators like in Ontario. This positions us as one of the three largest players in the Atlantic provinces. We also wanted to buy a sizable firm to get our activities off to a good start,” Charbonneau explains.

Synex can also share its commercial insurance expertise with GoToInsure. Charbonneau adds that this transaction will help him expand from coast to coast.

Integration challenges  

Over the course of its acquisitions, Synex has developed a 100-day plan to complete the integration of targets. What will the biggest challenge be this time? The COVID-19 pandemic, Charbonneau replies.

Specifically, the Synex CEO and his teams currently cannot travel outside of Quebec. Employees were informed of the deal virtually on Tuesday morning, he says. A similar scenario occurred when Laval-based Invessa was acquired.

“This deal demonstrates that we are capable of making acquisitions beyond the Quebec border. We are also approaching the psychological bar of taking over a firm with more than $100 million in premium volume, because this is actually our largest acquisition to date,” he says.

The amount of the transaction, which is being financed by CIBC, was not disclosed.