Mergers and Acquisitions |
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| Mergers and Acquisitions |
Mergers and Acquisitions 2025 Acquisitions
On February 3, 2025, the Company completed the acquisition of Velocity Risk Underwriters, LLC (“Velocity”), an MGU
specializing in first-party insurance coverage for catastrophe exposed properties, headquartered in Nashville, Tennessee,
for cash consideration of $548.6 million and contingent consideration of $21.1 million.
The $21.1 million of contingent consideration established for the Velocity acquisition was measured at the estimated
acquisition date fair value and was a non-cash investing transaction. The contingent consideration is based on specified
EBITDA targets over the next two fiscal years.
The following table summarizes the estimated fair value of the aggregate assets and liabilities acquired during the three
months ended March 31, 2025:
1 The acquired customer relationships have a weighted average amortization period of 13.3 years.
The Company recognized acquisition-related expenses, which include advisory, legal, accounting, valuation, and other
costs related to diligence, for Velocity of $3.9 million during the three months ended March 31, 2025, in General and
administrative expense on the Consolidated Statements of Income (Loss).
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. 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 as of December 31, 2024.
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. A measurement period adjustment related to working
capital of $5.2 million was recognized as an increase in Goodwill on the Consolidated Balance Sheets as of December 31,
2024.
On September 1, 2024, the Company completed the acquisition of certain assets of Greenhill Underwriting Insurance
Services, LLC, an MGU focused on the allied health industry headquartered in Houston, Texas, for cash consideration of
$11.7 million. 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 as of December 31, 2024.
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., 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.
Estimates and assumptions used in the acquisition valuations are subject to change within the measurement period up to
one year from each acquisition date.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial information presents the combined results of operations of the Company as if
the 2025 and 2024 acquisitions occurred on January 1, 2024. 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 adjustments to the unaudited pro forma financial information primarily include (i) a decrease of $48.1 million of
income tax expense related to the Common Control Reorganization (“CCR”) resulting from the Velocity acquisition for the
three months ended March 31, 2025, with an increase of $59.6 million in such income tax expense for the three months
ended March 31, 2024, related to the CCRs resulting from the Velocity and Innovisk acquisitions, (ii) an increase in
financing costs and interest expense resulting from the debt activity related to the US Assure and Innovisk acquisitions of
$48.4 million for the three months ended March 31, 2024, (iii) incremental amortization expense on acquired intangible
assets of $34.0 million for the three months ended March 31, 2024, (iv) a decrease in transaction costs of $5.3 million for
the three months ended March 31, 2025, and an increase in such costs of $10.7 million for the three months ended
March 31, 2024, and (v) a reduction in tax expenses related to the pro forma adjustments of $12.8 million for the three
months ended March 31, 2024.
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 12, 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 (Loss). The table below summarizes the amounts recognized:
As of March 31, 2025, the aggregate amount of maximum consideration related to acquisitions was $532.5 million of
contingent consideration and $12.9 million of contingently returnable consideration.
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