Northwest Insurance Agency Sold for $2.5M, 4.4x Cash Flow
Rachel Horner
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2 min read
About the Business
Industry: Insurance – Medicare & Small-Group Health Insurance Brokerage
Location: Pacific Northwest
Size: $750K–$1M in annual revenue, $500K–$750K in cash flow
Sale price: $2,500,000 (asking price: $3,000,000, later $2,550,000)
Listing to signed LOI: 109 days
Signed LOI to close: 88 days
The Challenge: Planning the Next Chapter
The two co-owners wanted a plan for the next chapter, and earlier talks with larger firms had gone nowhere. They wanted a buyer who would keep their employee and look after their longtime clients.
109 Days to a Signed LOI: Back to Market at a Sharper Price
What happened at every stage
Valuation: The agency listed at $3M, and the Baton advisor used early offers near $2.5M to show the owners where the market was.
Buyer Outreach: 164 buyers viewed the listing, 22 opened the data room, and the owners met with 3 buyers.
Offer Selection and Negotiation Support: An owner of other agencies signed an LOI 55 days after launch, then paused during diligence. The business went back on the market and its price was cut to $2.55M, and the same buyer returned within a month and re-signed.
Diligence and Closing Support: Baton ran weekly check-ins and tracked the SBA lender through underwriting, valuation and credit committee. The deal closed 88 days after the re-signed LOI.
The Results
The buyer is an experienced agency owner from another region who kept the agency's licensed employee and runs the book remotely. Through Baton's process, the business:
Sold for $2,500,000, about 4.4 times cash flow
Closed with about 95% in cash at closing (an SBA 7(a) loan plus buyer equity) and a small seller note
Went back under contract with the same buyer about five weeks after the pause
What's next for the owners?
The owners stepped back after a two-month transition, with the agency's employee staying on under the new owner.
Advice and Lessons for Future Sellers
Listen to the market early. Early offers near $2.5M were an honest read on value.
A paused deal isn't a dead deal. After going back to market at a sharper price, the same buyer returned.
Plan for a long SBA close. Weekly check-ins kept the lender process moving.