Trust is a key element to a win-win M&A


“KAP uses a completely unique model where we still get to be the agency’s owners. We still get to make local decisions. We can manage our customers and our staff the way we always have, but we get to be part of something bigger,” said Cartier. “We wanted to make sure that we had a stake going forward, that we could have autonomy to make decisions.”

Duluth, Minnesota-based Cartier Agency prides itself in providing more than 40 years of friendly, personal service to its communities. Though a small operation at around 15 employees, Cartier said the agency is looking to expand beyond Minnesota.

“Looking at the landscape of our industry, it just felt like we would get a competitive edge with a move like this. We can take a bit of work off our staff’s shoulders, in terms of the day to day running of any agency, which allows us to focus on our customers and sales,” Cartier told Insurance Business.

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How to choose the right partner

Picking the right partner was a challenge in the beginning, and the agency owner acknowledged that trust played a key role. Cartier Agency was wooed by other buyers in the last five years, but it came down to whether they could maintain autonomy.

“As independent agents, we were called by everybody,” he recalled. “You got a call from somebody that’s trying to purchase you on a weekly basis.

This wasn’t something that we came to quickly, or lightly. In the end, we felt it was the best opportunity for us to grow going forward. [Partnering with KAP], we have a partner that helps us manage the business, as we retain ownership and our employees while unlocking capital.”

Cartier said that he is looking forward to undergoing the planning and vision stage during the partnership’s transition process.

“We’ve got some unique, niche industries that we insure, so we’re trying to find ways to bring on more expertise that will help our current customer base. We’re excited about expanding our reach within the northern Minnesota area,” he explained. “We’re also getting a lot of help with managing producers, so our sales staff is excited. We’re excited to bring them more tools and growth opportunities.”

‘Connected autonomous’ partnership with KAP

Cartier Agency is the 16th independent agency to join KAP’s network, and the 48th transaction since KAP’s founding in 2020. The new partnership adds Minnesota to KAP’s expanding network of independent agencies, which it calls “platform partners,” and enhances its depth in the trucking and employee benefits lines of insurance.

KAP’s secret formula to its rapid growth is its “connected and autonomous” acquisition model for independent agencies. The platform seeks to attract independent, entrepreneurial agency owners that have taken significant risks to build their businesses. In its M&A model, the principal maintains significant equity in the agency, while KAP provides resources, capital, and expertise to boost the agency’s growth.

“We don’t buy 100% of our ‘platform partners.’ We allow leaders to retain ownership in their independent agency, in addition to having the opportunity to take shares in KAP. We think that uniquely aligns incentives around driving aggressive growth for the connected autonomy,” Jeff Turner, CEO of KAP, told Insurance Business in an earlier interview.

“We’ve been a member of Keystone [Insurers Group], which is a great organization that helps build this teammate mentality between independent agents. And KAP is furthering that and adding a few more tools to the mix,” Cartier said. “It’s nice to have a team behind you and not feel like you’re on an island on your own in this industry. So, I’m excited about the deal and excited about going forward.”

What are the elements that put an agency merger or acquisition on the path to success? Share your thoughts with us in the comments below.


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