• Could hire advisers for non-Swedish deals
• Has no upper limit on target size
• Targets SEK 1bn revenue before year-end

Swedish insurance broker and financial adviser Säkra is in talks with targets across the Nordics and expects to make up to five more acquisitions by year-end, CEO Eva Pantzar Waage told Mergermarket.

The Cinven-backed company is conducting due diligence on several companies and has a long list of other potential acquisition targets, she added.

The company welcomes approaches from advisers or companies regarding potential acquisition targets, particularly outside of Sweden, she said. It could potentially use local advisers in deal execution outside its home market, she said.

The company has an internal M&A team of four and in Sweden it uses KPMG for due diligence and White & Case for legal matters.

Säkra, which has made 25 acquisitions over the last 12 months and 70 since 2020, is planning to continue to actively consolidate the market, she said. Its focus is Sweden, but it is also interested in acquisition opportunities elsewhere in the Nordics and Europe, she said.

Säkra typically targets small brokers, but it is also interested in larger companies and has no upper limit, she said.

As well as brokers, it is also interested in niche players which complement its existing offer. These could include specialist brokers on the P&C side, family offices, robo advisors, or high net-worth brokers in the business-to-consumer segment, she said. The company is seeing a lot of growth in its new wealth business and is targeting more acquisitions in this field, she added.

Säkra finances acquisitions with a mixture of cash, debt, and equity, with almost all sellers reinvesting in the group upon a deal and becoming part of its presently 300-strong partner programme.

If a seller is looking to retire, this works well in cases where the target is based in an area where Säkra is already present, the CEO said.

Organic growth drivers

Broker penetration in Sweden and in the Nordics in general is much lower than elsewhere in Europe, Pantzar Waage said. The penetration level is at around 30% in Sweden for SME companies, and around 60% for large companies, and this means there is still plenty of organic growth room too, she said.

Säkra has in previous years grown revenue by around 18% and EBITDA by 45% year-on-year organically, but given the current macroeconomic environment expects this to decrease by a couple of percentage points. The company expects M&A to account for approximately 40% of overall annual growth.

Säkra has a strong presence outside the big Swedish cities, and in those areas its competitors are local banks. Its biggest Swedish peers are Nordic Capital-backed Max Matthiessen and KKR [NYSE:KKR] portfolio business Soderberg & Partners.

At the time of publication, Max Matthiesen and Soderberg & Partners have Likely to Exit (LTE) scores of 25 and 12 out of 100, respectively, according to Mergermarket’s predictive algorithm*. In Max Matthiessen’s case, the LTE score is strongly driven by its sponsor’s exits in the region and sector, while Soderberg & Partners’ score is strongly influenced by the number of days the sponsor has held it.

Säkra, founded in 1999, was acquired by Cinven in February this year from Adelis which had invested in the business in 2020, when it had approximately SEK 250m (EUR 21.3m at today’s exchange rate) revenue and 130 employees, Pantzar Waage noted. Säkra brokers and senior staff remain significant owners in the company, as per the deal announcement.

The company currently has 530 employees in total across 60 offices across Sweden, with a small presence in Denmark, Finland, and Norway through two recent acquisitions, Pantzar Waage said. It targets SEK 1bn revenue before year-end, she added.

Säkra has around 60,000 customers. A majority are SME companies but is growing its base of large corporate customers. It also advises 170,000 individuals within employee benefits and wealth management.

*Mergermarket’s LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.