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Porch Group (NASDAQ: PRCH) has announced an agreement to acquire Allied Trust’s insurance carrier, managing general agency (MGA) and captive reinsurance operations in a transaction valued at approximately $200 mn, accelerating its expansion in the US homeowners insurance market.
The deal will give Porch Insurance Reciprocal Exchange a presence in Louisiana while adding operations in Texas, South Carolina and North Carolina.
- Porch Group and Porch Insurance Reciprocal Exchange have agreed to acquire Allied Trust’s insurance operations in a transaction valued at approximately $200 mn, subject to adjustments.
- The acquisition is expected to add $200 mn in Reciprocal Written Premium and $25 mn in adjusted EBITDA, excluding the Reciprocal, during the first full year after closing.
- Assuming a January 1, 2027 closing, Porch targets more than $900 mn in reciprocal written premiums, 360,000 policies written and $180 mn in adjusted EBITDA for 2027.
Allied Trust operates across all four states, with Louisiana accounting for nearly half of its premiums in 2025.
The acquisition is expected to contribute approximately $200 mn in Reciprocal Written Premium (RWP) and $25 mn in adjusted EBITDA, excluding the Reciprocal, during the first full year following closing and planned portfolio optimization.
Porch also expects to gain more than a decade of historical claims data, which it intends to combine with its proprietary property information to improve insurance pricing, underwriting and risk selection.
Porch Group structures Allied Trust acquisition as $200 mn transaction
Under the definitive agreements, Porch Insurance Reciprocal Exchange will acquire Allied Trust’s insurance carrier for an initial base purchase price of $55 mn in cash. The amount is subject to adjustments based on the carrier’s statutory surplus and indebtedness at closing.
An additional $50 mn in deferred consideration will be payable over the following 12 months. The Reciprocal can elect to make those payments in cash or using existing Porch Group shares held in its investment portfolio.
Separately, Porch Group will acquire Allied Trust’s MGA and captive reinsurance entity for an aggregate base purchase price of $95 mn.
That consideration comprises $75 mn in cash and an expected $20 mn in Porch Group shares. The combined transaction value is therefore approximately $200 mn before any closing adjustments, with $105 mn allocated to the insurance carrier and $95 mn to the MGA and captive reinsurance businesses.
Porch expects the carrier acquisition to be approximately neutral to the Reciprocal’s statutory surplus. Based on the projected first-year adjusted EBITDA contribution of $25 mn, the $95 mn acquisition of the MGA and captive reinsurance operations represents an earnings multiple below four times, according to the company.
The transaction remains subject to regulatory approvals and customary closing conditions, with completion expected in the first quarter of 2027.
Allied Trust to expand Porch insurance operations in Louisiana
The acquisition supports Porch’s strategy of generating fee-based earnings from insurance services while maintaining a separate reciprocal insurance structure.
Following completion, Allied Trust is expected to operate under the same model as Porch’s existing insurance business.
Porch Insurance Reciprocal Exchange will own the insurance carrier, collect premiums and pay insurance claims, commissions, reinsurance expenses and operating service fees.
Porch Group will receive commissions and fees primarily linked to premium and policy volumes, supporting its fee-based earnings model.
Matt Ehrlichman, chief executive officer of Porch Group, described Allied Trust as a strategic addition that would expand the company’s insurance products and geographic reach.
He said the combination would bring an established insurance team, additional scale and historical claims information that could become more valuable when integrated with Porch’s property data and insurance operations.
The company expects the acquisition to create opportunities for improved underwriting performance, distribution growth and operational efficiencies.
Its plans include integrating Allied Trust’s historical claims information into existing insurance analytics to support more accurate pricing and risk selection.
Porch targets more than $900 mn in 2027 reciprocal written premiums
Porch has outlined ambitious financial targets for 2027, although these depend on the acquisition closing at the beginning of the year.
Assuming a January 1, 2027 completion, the company expects to achieve:
- More than $900 mn in Reciprocal Written Premium.
- More than 360,000 Reciprocal Policies Written.
- More than $180 mn in adjusted EBITDA, excluding the Reciprocal.
These figures are management targets rather than formal financial guidance. Reciprocal Written Premium measures annualized premiums written, including certain policy fees and surplus contributions, before reinsurance deductions, and is not equivalent to recognized revenue.
Porch expects to issue formal 2027 financial guidance during the first quarter of next year, following regulatory approval and completion of the acquisition.
The company plans to begin integration preparations before closing, including identifying opportunities to expand Allied Trust’s distribution and generate additional synergies.
Porch considers equity offering to support insurance capital
Separately, Porch Group expects to file for an at-the-market equity offering program that would allow Porch or the Reciprocal to sell shares of PRCH stock periodically.
For the Reciprocal, the program would provide flexibility to monetize portions of its existing shareholdings over time and strengthen statutory surplus to support future insurance growth.
The proposed program would not require an immediate sale of shares, and the timing and amount of any transactions would depend on capital requirements and market conditions.
The acquisition would expand Porch’s presence across the southeastern United States while adding an established portfolio of homeowners insurance business and a new source of operating fees.
Its expected financial contribution and operational benefits remain contingent on regulatory approval, the timing of closing and the successful integration of Allied Trust’s businesses.
