Dealmaking is about to play a bigger part in the growth strategy at Oswald Cos., says Chairman and CEO Robert J. Klonk.
“We’ve always been opportunistic in our expansion, and the opportunity is there for larger organizations that don’t have strong perpetuation programs and don't want to sell to a publicly held company,” Klonk says. “If we can make them better, and they’re going to make us better, it’s going to be a good marriage and that’s what we're going to do.”
Last October, Oswald acquired InsureOne Benefits, a Litchfield-based health insurance and Medicare benefits brokerage firm. It was similar to other small acquisitions Oswald has made in recent years.
“What we’re looking to do in the future is a little bit more of a bigger scale,” Klonk says. “It’s to take this message and this culture that we have here and find fellow organizations that I have known through my 40 years in the business that want to be a part of something like what we have.”
Oswald was founded in 1893 and is one of the largest independent risk management and insurance brokerage firms in the U.S.
Dealmakers spoke with Klonk about how he approaches dealmaking opportunities and the role that being employee owned plays in everything that happens at Oswald.
Find a niche
While acquisitions have not typically been a priority at Oswald, the company has taken an opportunistic approach to dealmaking over the years.
“When we find people who think like us, who want to be a part of this culture and who are going to make us better and give us the chance to make them better, then we take advantage of those opportunities,” Klonk says.
About a decade ago, Oswald bought Selvaggio, Teske & Associates. The firm specialized in coverage for architects and engineers, filling a niche for Oswald.
“Paula Selvaggio and Eric Teske, the two principals, didn’t really have a perpetuation plan, and they were looking to partner with a bigger firm that had a good construction practice,” Klonk says. “So President and COO David Jacobs brought them into our construction practice, and we have the largest design and construction practice in Ohio today.”
A few years later, Oswald acquired Union Insurance Group from Steven Baltas.
“Steve is a guy I’ve known in the benefits business for a long time,” Klonk says. “I know how he thinks. He had built a successful small agency by himself and wanted to partner with a larger firm. He’s come over and been one of our absolute superstars here as a principal in our organization.”
Deals to buy The Hoffman Group and InsureOne presented similar opportunities that Klonk and his team couldn’t pass up.
“We’re not looking for acquisitions as much as we’re looking for partners,” Klonk says. “We don’t have a full-time staff here that goes out and looks for acquisitions. That’s not our model. These are people I’ve known through my 40 years in the business that I trust.”
Stick to your culture
His approach to M&A is consistent with Klonk’s overall philosophy on leading the business: If it’s good for the culture and the company’s employee owners, it’s good for the business and worthy of consideration.
“We don’t worry about the New York Stock Exchange,” Klonk says. “We don't worry about some private equity owner and what returns they want. We don’t worry about a bank that owns us. All we worry about is our customers and each other. That’s the beauty of being employee-owned. We can really focus our attention on the people who are important and not on some outside force that only wants to make money.”
Oswald recently completed a succession plan in which Klonk became chairman, in addition to CEO, and Marc S. Byrnes shifted to chairman emeritus.
“My job is to find my successor and to make sure this keeps going and make sure we position the company in a way that not only takes care of our customers but takes care of the next generation of employee-owners,” Klonk says.
This commitment to culture informs how Oswald will assess acquisition opportunities going forward. History has taught Klonk that it’s a good way to ensure success.
“There are a lot of people out there acquiring insurance organizations that only care about the dollar, and that’s not what we’re about,” Klonk says. “We’re about our customers and our employee-owners. If that’s what's important to you, then yes, this partnership is going to be extremely important to you.”