Parent of Petaluma’s Arrow Benefits Buys Sebastopol Insurance Benefits Firm Aita and Associates

Coinciding with a surging growth plan, the parent company of Arrow Benefits Group bought a Sebastopol insurance benefits firm, it announced on Sept. 15.

Aita and Associates has become Arrow Benefits of Petaluma. The acquisition that took place in May comes a week after parent Patriot Growth Insurance Services based in Pennsylvania reported a plan to recapitalize on its investments.

Arrow Benefits CEO Joe Genovese told the Business Journal that Aita and Associates served as an ideal fit with Arrow, with its 1,500 clients and 40 employees. He also liked how Aita offered similar employee benefits, a crucial component to retaining and attracting good talent in the age of a coronavirus-spawned labor shortage.

“Employee benefits, in the true sense of the word, has become a way of compensation as a recruitment tool,” he said. “More employers are feeling the need to provide benefits and increase their benefit offerings.”

Arrow Benefits retained one of Aita’s company principles, Bob Aita, and three other employees on staff at the time of the purchase. The other company partner, Aita’s wife Nancy, retired.

“The trend in the industry is consolidation,” said Bob Aita, who now works for Arrow as a senior benefits consultant. At age 74, Aita said he was seeking an opportunity to wind down and Arrow had pursued his company for three years.

“We weren’t going to hand over the business to just any company,” Aita said.

Point well taken, Patriot Growth CEO Matt Gardner noted.

“We definitely have strong growth plans for Arrow,” Gardner told the Business Journal.

The financials behind the Sonoma County transaction involving the Sebastopol company were undisclosed as well as details surrounding its recapitalization plan. Typically, companies pursue the plans to restructure debt and assets upon receiving investments.

Founded in 2019, privately-held Patriot Growth owns 64 benefits and property and casualty insurance companies serving more than 100,000 clients across the United States and staffs 1,100 employees. According to Dunn & Bradstreet, the corporation has $62.5 million in annual revenues.

Gardner explained that his company seeks mergers with companies reaching their prime with “a ton of gas left in the tank.” He insisted there’s no “magic number” of how many firms it plans to add to its portfolio.

But the 30-year insurance benefits executive agreed with Aita that the trend in the industry shows small firms hitching their wagons to larger corporations as a means to offer more resources to tap into.

“It’s getting harder and harder for small operators to have the resources to handle the demand,” Gardner said.

To strengthen its own financial footing, the recapitalization plan for the Fort Washington, Penn.-based company is due for completion in a month. The plan, managed by Morgan Stanley financially, revolves around the infusion of capital involving Summit Partners, an investor based in Boston, Mass., and GI Partners in San Francisco.

To those investors, Patriot Growth is walking the talk.

“Matt (Gardner) has demonstrated an ability to attract outstanding talent to Patriot, both in terms of employees as well as acquisition targets that have expanded the company’s footprint and capabilities,” GI Partners Managing Director Jeff Sheu said in a statement.