The M&A Version of the Hippocratic Oath: Don’t Break What You Just Bought
Integrated Specialty Coverages (ISC) was founded as a tech-enabled MGA and program administrator in 2016.
It partnered in 2018 with private equity firm Sightway Capital, which sold ISC for a profit to KKR in 2021. With PE support, ISC has acquired several MGAs and has eyes open for more. We talked with Tim Nickel, president of ISC, about the value of private equity backing.
Prior to ISC, I spent about 13 to 14 years in private equity where we invested in eight or nine insurance businesses. Those were mid-market investment firms, so the firms were a little different from KKR, but it gave me some good perspective.
Prior to ISC, I spent about 13 to Could we have gotten to the same place without PE backing? We could never have made our first two acquisitions without our original financial sponsor, which was Sightway Capital. And we did need the backing of private equity money to continue our business acquisition goals. The KKR partnership has been great.
KKR has done more than just provide money, though. They’ve helped us grow and institutionalize the business. We were the combination of several different acquisitions—we bought our first business in February 2019—so we had to bring it all together with financial reporting, budgets, organizing our individuals. KKR accelerated our maturity as a business. In the first two years, KKR’s in-house operational consulting team, Capstone, has helped guide us. There’s been a lot of emphasis on our development as an MGA and to think about ongoing acquisitions; we’ve made two acquisitions since the KKR buyout, and we’ve evaluated 30 or more. It’s impossible to say how our journey would look with someone else, but KKR has added value to the business—spending a ton of time on the operations side of the business in addition to providing assistance with financings, M&A and other growth initiatives.