With the Ontario government poised to put more money into child care, the time has come for McFarlan Rowlands Brokerage to acquire Magenta Insurance Professionals, a specialist insurance broker focused on on children’s and youth activities, said Burke Neale, CEO of McFarlan Rowlands.
Magenta has two decades of experience in specialized programs in child and youth protection, education and other youth activities. Neale spoke to Canadian Underwriter Last Wednesday about the deal, which came into effect on June 1.
“Lisa Vercillo, owner of Magenta, started this program years ago,” said Neale. “She was looking for a brokerage that could help her develop it. And the Ontario government has certainly invested a lot of money in child care. There is a lot of money invested in child care spaces and child care spaces. So we think this is a golden opportunity for us. Magenta is a small brokerage house. Lisa needed a certain ladder to level up.
In his Early Years and Child Care Annual Report 2020, Ontario has pledged more than $ 2 billion in funding for early years and child care, including approximately $ 375 million for the Ontario Child Care Tax Credit. children. Also in 2020-2021, it pledged to create up to 30,000 child care spaces in schools over five years, including up to 10,000 spaces in new schools. In addition, it plans to allocate $ 208 million to municipalities to support salary increases for eligible child care professionals.
With the acquisition of Magenta, McFarlan Rowlands, based in southwestern Ontario, continued its strategy of diversifying its portfolio and providing regional solutions for niche industries. Earlier this year, McFarlan Rowlands completed the purchase of Hamilton Ward & Cathers Insurance, a company in Aylmer, Ontario, which markets home, auto and commercial insurance, including insurance for classic cars, tenants, condominiums, contractors, manufacturers and farms, among other things.
Burke said the acquisition of Magenta lines up well with other niche product offerings from McFarlan Rowland, which relate to mental health and youth services. “We already have a program for Red Cross instructors across Canada that includes swim lessons for kids,” said Burke. “We also have, and it’s not necessarily youth-oriented, but we have a psychology program – we provide psychologists, psychoanalysts, psychotherapists, and so on. We insure them across Canada. This [deal] allowed us more scale.
For Vercillo, president of Magenta, “being part of a much larger organization gives our team improved markets and capabilities to meet the needs of our customers,” she said in a statement announcing the agreement. “A big part of the decision to join McFarlan Rowlands was culture. I know this is a good solution for our team and our clients.
Neale described McFarlan Rowlands’ culture as “very family oriented”.
“We care about the people who join us,” Burke said. “We want to protect their staff. Their people mean a lot to them. We don’t [want to] turn their lives upside down.
Asked about the possibility of future acquisitions, Neale said McFarlan Rowlands was strategic about the acquisitions he wanted to pursue and was not willing to make deals for the sake of making deals. He said the plan is for balanced growth going forward, with around 50% of that growth organic and 50% through M&A activity.
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