What Buyers Evaluate

Understanding what buyers look for helps sellers prepare their businesses for optimal outcomes. While each acquirer has unique criteria, common themes emerge across strategic buyers, private equity firms, and individual investors.

Types of Acquirers

Strategic Buyers (Other Title Companies)

Strategic buyers are typically other title companies—often larger regional or national operators—looking to expand their geographic footprint, add capacity, or acquire talent.

• Motivations: Market expansion, competitor elimination, economies of scale, talent acquisition
• Typical approach: Often pay premium multiples due to synergy potential
• Integration style: Usually rebrand acquired agencies; may consolidate operations

Private Equity Firms

PE firms have become increasingly active in title insurance, often building "platform" companies through multiple acquisitions. They bring capital and operational expertise but typically have defined exit timelines.

• Motivations: Build scale for eventual exit, operational improvement opportunities
• Typical approach: Disciplined valuation methodology, detailed due diligence
• Integration style: May maintain brand; implement standardized processes and reporting

Family Offices & Individual Investors

High-net-worth individuals and family offices seeking stable, cash-flowing businesses. Often more flexible on structure and timeline.

• Motivations: Stable cash flow, diversification from other investments
• Typical approach: May be less sophisticated; often rely on advisors
• Integration style: Usually maintain existing brand and team

Primary Evaluation Criteria

1. Underwriter Relationships

Your relationships with title underwriters are among the most scrutinized aspects of any acquisition. Buyers evaluate:

• Tier of underwriters: Relationships with Fidelity, First American, Stewart, or Old Republic carry more weight than regional underwriters
• Length of relationships: Long-standing relationships signal stability and credibility
• Policy volume and claims history: High volume with low claims demonstrates operational quality
• Exclusivity arrangements: Non-exclusive relationships provide flexibility for buyers
• Remittance terms: Better splits and remittance schedules improve economics

2. Geographic Positioning

Location matters significantly in title insurance. Buyers typically seek specific geographic characteristics:

• Growth markets: Presence in high-growth metros (Sunbelt, Mountain West) commands premiums
• Market share: Meaningful share in core markets demonstrates competitive strength
• County coverage: Multiple county licenses expand addressable market
• Strategic gaps: Buyers may pay more for agencies that fill holes in their own footprint

3. Revenue Quality

Not all revenue is created equal. Buyers analyze revenue composition carefully:

• Channel mix: Diversification across purchase, refi, commercial, and builder channels
• Customer concentration: Dependency on any single customer raises concerns
• Customer relationships: Direct relationships vs. referral-dependent business
• Revenue trend: Multi-year growth trajectory vs. one-time spikes
• Fee structure: Competitive pricing that can be maintained post-acquisition

4. Operational Infrastructure

Modern operations reduce integration risk and signal a well-managed business:

• Technology stack: Modern title production software vs. legacy systems
• Digital capabilities: RON/eClosing readiness, electronic document management
• Process documentation: Written procedures for key operational functions
• Reporting systems: Ability to produce detailed financial and operational reports
• Cybersecurity: Wire fraud prevention measures, data protection protocols

5. Team & Talent

People often make or break an acquisition:

• Key person dependency: Can the business run without the owner?
• Staff tenure: Long-tenured employees signal stability and institutional knowledge
• Management depth: Second-tier leadership that can assume expanded roles
• Customer relationships: Which employees hold key customer relationships?
• Compensation structure: Are employees retained with competitive packages?

Red Flags Buyers Watch For

Be aware of common concerns that can derail transactions or reduce valuations:

Preparing Your Agency

Sellers who prepare in advance typically achieve better outcomes. Consider addressing these areas 12-24 months before a potential sale:

1. Clean up financials: Separate personal expenses, normalize owner compensation, ensure accurate reporting
2. Diversify revenue: Reduce customer concentration, expand channel mix
3. Document operations: Create written procedures for key processes
4. Upgrade technology: Address obvious gaps in your tech stack
5. Strengthen team: Develop management depth, secure key employees
6. Address compliance: Resolve any outstanding regulatory matters