Why Agency Multiples Held While Deal Volume Fell: The 2026 M&A Picture in Four Datasets

Two things are simultaneously true about the agency M&A market, and most coverage picks only one. Deal volume has fallen for three consecutive years: per OPTIS Partners’ Q1 2026 report, the 148 announced transactions in the first quarter of 2026 were the lowest Q1 total since 2016. And the price of an agency has barely moved: per Sica Fletcher’s 2025 valuations report, average EBITDA multiples for deals above $1 million of EBITDA ran 11.8x through the first half of 2025, essentially flat against the 11.9x full-year 2024 average and well above the 9.4x trough of 2020.

A falling market where prices hold is not a paradox. It is a market whose marginal buyer does not behave like a cyclical buyer. The advisory firms that publish the data also publish the mechanism, and it runs through one variable: the spread between what an acquisition yields and what the debt to fund it costs.

The volume floor

The slide is real and the people counting it think it is ending. OPTIS Partners’ Q1 2026 count of 148 deals was down 6 percent year over year on top of two prior down years. OPTIS partner Steve Germundson, in the firm’s Q1 2026 commentary, put a floor under it:

The industry has ridden down a three-year slide in deal volume, which we believe is beginning to bottom out to about 650 deals per year.

The annual counts that frame that floor differ by tracker, which is worth being precise about. MarshBerry’s 2025 report logged 649 announced U.S. transactions through November 30, 2025. Mike Fletcher’s 2026 outlook in Leader’s Edge cites 714 deals for full-year 2025, down from the post-pandemic highs but still above pre-2020 levels. Different firms count announced deals differently and cover different windows; the shape they describe is the same.

Who is still buying at the floor matters more than the count. Per OPTIS, private-equity-backed buyers accounted for 72 percent of Q1 2026 announced transactions, with 29 of the 55 unique buyers PE-backed; Inszone led the quarter at 17 deals with BroadStreet Partners at 16. That concentration is not new: per MarshBerry, private-capital-backed buyers drove 72.6 percent of announced 2025 deals (471 of 649), independent agencies bought in 13.7 percent (89 deals), and the top three buyers alone (BroadStreet Partners, World Insurance Associates, and Hub International) represented 20.2 percent of total volume.

OPTIS managing partner Tim Cunningham also flagged where the next wave of demand is forming, at the small end of the market: “We are seeing an emerging group of new ventures backed by private-equity and family-office capital pursuing this group because of the large supply of future sellers, enhancements in technology, and long-term changes in the way insurance at the smaller end will be sold and serviced.” For larger firms, OPTIS notes buyers see a “perceived scarcity factor” alongside operational improvements those firms have made.

The price that would not fall

Set the volume curve against the price curve and the story sharpens. Per Sica Fletcher’s published series for deals above $1 million of EBITDA: a 9.4x average at the 2020 trough, a 12.1x peak in Q3 2024, 11.9x across 2024, and 11.8x through the first half of 2025. Fletcher’s Leader’s Edge outlook puts full-year 2025 at roughly 11.4x for the same cohort, approximately 20 percent above 2020, and describes the pattern as stabilization after the rapid expansion of prior years. Read together, the two cuts say the same thing: the price of a quality agency spent three down-volume years moving sideways near its all-time high.

The same Sica Fletcher series carries the figure that matters most for an individual seller: advisor-represented deals cleared roughly 25 percent higher multiples than unrepresented transactions over the period. Whatever the market average does, the spread between a well-run competitive process and a single-buyer negotiation is wider than any year-over-year move in the average itself.

The spread that explains both curves

Sica Fletcher’s report connects the volume decline and the price resilience to the same mechanism, and it publishes the numbers behind it. The average insurance broker borrowing rate equates to SOFR plus 450 basis points. When 90-day SOFR ran near zero, that financing math gave buyers what the report calls an attractive spread between expected returns and debt cost: 4.8 percent in Q1 2019, widening to 6.0 percent in Q4 2020. Then the Fed took SOFR from functionally zero to 5.4 percent by December 2023, and the spread went negative for the first time in years.

A negative spread is the textbook condition for a deal market to stop. Volume did fall. Prices did not, and the report is direct about why: “expected buyer returns remained surprisingly resilient and the acquirer community absorbed rising debt costs without material valuation declines.” The consolidators kept paying 11x-plus through a negative-spread environment because their model prices scale, recurring revenue, and their own platform arbitrage, not just the cash-on-cash math of a single acquisition.

By June 30, 2025, the report puts the spread at approximately negative 0.3 percent: still negative, but a fraction of the post-tightening gap. Sica Fletcher’s forward view follows from its own series: it anticipates the return to a positive spread leading to increased use of leverage, expects valuations to hold, and believes the late-2025 rebound in M&A activity will continue into 2026.

The caveats the sources themselves flag

The same outlook carries warnings worth taking as seriously as the headline. Fletcher notes that large, high-profile transactions in late 2024 and early 2025 “revealed valuation compression when viewed on an adjusted basis,” and that “midmarket agencies remain comparatively resilient” while larger brokers sit more exposed to slowing premium growth. In plain terms: the published averages are healthiest in the middle of the market, and the top end is showing adjusted-basis stress even while headline multiples look stable.

The buyer base remains deep by the sources’ own counts, with Fletcher citing more than 50 private-equity-backed and public acquirers actively pursuing scale. Depth of demand is what holds auctions competitive; it is also what makes structure quality, not headline price, the place where individual outcomes diverge.

What the data supports, and what it does not

The published record supports this much: deal volume is at or near the floor the trackers themselves project, the multiple range for quality agencies above $1 million of EBITDA is published and stable, the buyer mix is overwhelmingly private-capital-backed, and the borrowing-spread math that governed the last cycle is approaching the line that historically restarts leverage. The forward statements all come from firms with a commercial interest in an active deal market, which is the right discount to apply to any advisor’s optimism.

What the data does not do is price your agency. The averages describe a cohort; the eight factors that move an individual multiple are covered in the valuation guide, the arithmetic is in the valuation calculator, and the difference between a headline number and what actually lands guaranteed at close is in the deal structure comparator.