Mergers and Acquisitions |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mergers and Acquisitions |
MERGERS AND ACQUISITIONS 2024 Acquisitions
On May 1, 2024, the Company completed the acquisition of Castel Underwriting Agencies Limited (“Castel”), a managing
general underwriting platform headquartered in London, England, for cash consideration of $247.6 million, $2.2 million of
RYAN Class A common stock, and contingently returnable consideration of $4.9 million. During the year ended
December 31, 2024, measurement period adjustments related to deferred tax liabilities of $1.6 million, taxes payable of
$0.9 million, and working capital of $0.5 million were recognized as a net $2.0 million decrease in Goodwill on the
Consolidated Balance Sheets.
On August 30, 2024, the Company completed the acquisition of US Assure Insurance Services of Florida, Inc. (“US
Assure”), a program specializing in builder’s risk insurance headquartered in Jacksonville, Florida, for cash consideration
of $1,079.8 million and contingent consideration of $103.8 million. During the year ended December 31, 2024, a
measurement period adjustment related to working capital of $5.2 million was recognized as an increase in Goodwill on the
Consolidated Balance Sheets.
On September 1, 2024, the Company completed the acquisition of certain assets of Greenhill Underwriting Insurance
Services, LLC (“Greenhill”), an MGU focused on the allied health industry headquartered in Houston, Texas, for cash
consideration of $11.7 million. During the year ended December 31, 2024, measurement period adjustments related to
working capital of $0.4 million and the initial valuation of customer relationships of $0.1 million were recognized as a net
$0.3 million increase in Goodwill on the Consolidated Balance Sheets.
On September 13, 2024, the Company completed the acquisition of the Property and Casualty (“P&C”) MGUs owned by
Ethos Specialty Insurance, LLC (“Ethos P&C”) for cash consideration of $44.0 million. Ethos P&C is composed of eight
programs which underwrite on behalf of insurance carriers.
On October 1, 2024, the Company completed the acquisition of certain assets of EverSports & Entertainment Insurance,
Inc. (“EverSports”), an MGU focused on sports, leisure, and entertainment headquartered in Carmel, Indiana, for $43.1
million of cash consideration. Total consideration for this acquisition also includes contingent consideration, however, the
contingent consideration value was de minimis as of the acquisition date.
On November 4, 2024, the Company completed the acquisition of Innovisk Capital Partners (“Innovisk”), which is
composed of seven specialty MGUs headquartered in London, England, for cash consideration of $426.8 million.
The $103.8 million of contingent consideration liabilities and $4.9 million of contingently returnable consideration
established for the acquisitions that occurred during the year ended December 31, 2024, were measured at the estimated
acquisition date fair value and were non-cash investing transactions. These arrangements are based on the individual
businesses’ revenue or EBITDA targets, or both, over the next two to three fiscal years.
The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired during the year
ended December 31, 2024, as of the date of each acquisition and includes any measurement period adjustments:
1 The customer relationships acquired during the year ended December 31, 2024, have a weighted average amortization
period of 13.4 years.
Estimates and assumptions used in the acquisition valuations are subject to change within the measurement period up to
one year from each acquisition date. Estimated tax deductible goodwill of $735.8 million was generated as a result of these
acquisitions. The Company recognized acquisition-related expenses, which include advisory, legal, accounting, valuation,
and other costs related to diligence, for the acquisitions above of $19.1 million during the year ended December 31, 2024,
in General and administrative expense on the Consolidated Statements of Income. In conjunction with the closing of the
Castel acquisition, the deal-contingent foreign currency forward (the “Deal-Contingent Forward”), as described in Note 13,
Derivatives, was settled.
The Company recognized an aggregate $102.8 million of revenue related to the 2024 acquisitions above from their
respective acquisition dates during the year ended December 31, 2024.
2023 Acquisitions
On January 3, 2023, the Company completed the acquisition of certain assets of Griffin Underwriting Services (“Griffin”),
a binding authority specialist and wholesale insurance broker headquartered in Bellevue, Washington, for cash
consideration of $115.5 million.
On July 1, 2023, the Company completed the acquisitions of certain assets of ACE Benefit Partners, Inc. (“ACE”), a
medical stop loss general agent headquartered in Eagle, Idaho, and Point6 Healthcare, LLC (“Point6”), a distributor of
medical stop loss insurance on behalf of retail brokers and third-party administrators headquartered in Plano, Texas, for an
aggregate $46.8 million of cash consideration and $2.3 million of contingent consideration. During the year ended
December 31, 2024, a measurement period adjustment related to the initial valuation of contingent consideration of $0.6
million was recognized as an increase in Goodwill on the Consolidated Balance Sheets.
On July 3, 2023, the Company completed the acquisition of Socius Insurance Services (“Socius”), a national wholesale
insurance broker headquartered in Northern California, for $253.5 million of cash consideration, $5.8 million of contingent
consideration, and $2.7 million of RYAN Class A common stock.
On December 1, 2023, the Company completed the acquisition of AccuRisk Holdings, LLC (“AccuRisk”), a medical stop
loss managing general underwriter headquartered in Chicago, Illinois, for $98.3 million of cash consideration. During the
year ended December 31, 2024, measurement period adjustments related to the initial valuation of contingent consideration
of $0.3 million and deferred tax assets of $0.4 million were recognized as increases in Goodwill on the Consolidated
Balance Sheets.
The Company recognized acquisition-related expenses, which include advisory, legal, accounting, valuation, and other
costs related to diligence, for the 2023 acquisitions above of $7.1 million during the year ended December 31, 2023, in
General and administrative expense on the Consolidated Statements of Income.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial information presents the combined results of operations of the Company as if
the 2024 and 2023 acquisitions, excluding Griffin as it is already included in the results of all periods presented, all
occurred on January 1, 2023. The unaudited pro forma financial information is presented for informational purposes only
and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the
date indicated or of results that may occur in the future. The pre-acquisition Castel and US Assure results included in the
pro forma figures below contain acquisition-related expenses that were not considered pro forma adjustments for the
Company.
The unaudited pro forma financial information includes adjustments of (i) incremental amortization expense on intangible
assets acquired of $77.0 million and $146.4 million for the years ended December 31, 2024 and 2023, respectively, (ii) a
decrease of $24.0 million and an increase of $8.4 million in transaction costs for the years ended December 31, 2024 and
2023, respectively, (iii) incremental financing costs and interest expense resulting from the debt activity related to the US
Assure and Innovisk acquisitions of $20.6 million and $99.0 million for the years ended December 31, 2024 and 2023,
respectively, (iv) an increase of $9.5 million of income tax expense for the year ended December 31, 2023, related to the
2024 CCRs (as defined in Note 18, Income Taxes), with an equal decrease in income tax expense for the year ended
December 31, 2024, and (v) a reduction in tax expenses related to the pro forma adjustments of $8.4 million and $26.2
million for the years ended December 31, 2024 and 2023, respectively.
Contingent Consideration
Total consideration for certain acquisitions includes contingent consideration or contingently returnable consideration,
which is generally based on the EBITDA or revenue of the acquired business following a defined period after purchase.
Further information regarding fair value measurements of contingent consideration and contingently returnable
consideration is detailed in Note 15, Fair Value Measurements. The Company recognizes income or loss for the changes in
fair value of estimated contingent consideration and contingently returnable consideration within Change in contingent
consideration, and recognizes accretion of the discount on these assets or liabilities within Interest expense, net, on the
Consolidated Statements of Income. The table below summarizes the amounts recognized:
As of December 31, 2024, the aggregate amount of maximum consideration related to acquisitions was $563.1 million
related to contingent consideration and $18.8 million related to contingently returnable consideration.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||