Irvine, Calif.-based consortium, marks the first foray by foreign players into the U.S. third-party marketing business.
Though based in California, IBIS Group is mostly owned by two units of the French banking company Paribas and a French reinsurance company.
Paribas Principal Inc., the New York-based investment arm of Paribas; Cardif SA, Paribas' insurance arm; and Scor SA, a Paris-based reinsurance company, teamed up to buy a majority stake from Roger Duerr, Duerr's chief executive officer and outright owner.
Terms of the transaction, which closed Sept. 8, were not disclosed. However, Kenneth Kehrer, a Princeton, N.J.-based consultant who brokered the deal, said the acquisition price for a company like Duerr is typically 1% to 3% of sales. According to a survey of third-party marketers conducted by Kenneth Kehrer Associates, Duerr's sales totaled $548 million in 1998.
Cardif operates in 19 countries, mainly in Europe and South America; this is its first foray into the United States market. Based in Rueil Malmaison, France, it develops, manages, and distributes insurance products.
Duerr, located in Irvine, provides securities, mutual funds, annuities, and other insurance products to financial institutions, including over 30 banking companies.
Douglas P. Jackson, Duerr's president, said the company's management would not change.
As a bank subsidiary, under U.S. law Cardif cannot sell insurance products here, which prompted one analyst to question why a European bancassurance firm would be interested in an American third-party marketer. Bancassurance is the European method of integrating insurance sales into other areas in the bank.
James Alexander, an analyst at BNP Equities in Paris, said Cardif may be trying to gain a foothold in the United States in anticipation of deregulation that would allow it to sell insurance products here. And Duerr would benefit from its expertise in selling life insurance through banks, he said.
"American firms don't have expertise in bancassurance," he said. "The French market is probably one of the most successful bancassurance markets in Europe."
Duerr does plan to make insurance sales "an important part of our expansion efforts," Mr. Jackson said, and Duerr and Cardif have a lot to learn from each other.
The acquisition will also provide Duerr with capital to expand its operations geographically, Mr. Jackson said. Currently, Duerr's banking company clients are all based in the western United States.
"This gives us the capital infusion necessary to survive without compromising our ability to provide products and services independently," Mr. Jackson said. "The fact that Cardif is prohibited from selling products here gives us another level of comfort."
