CHICAGO - Ryan Specialty Group (NYSE: RYAN), a global specialty insurance organization, is nearing the completion of its acquisition of Innovisk Capital Partners, a move expected to enhance its underwriting capabilities. The transaction is anticipated to finalize early next month, expanding the Ryan Specialty Underwriting Managers (RSUM) segment.
Innovisk, established in 2017 with headquarters in London, operates a suite of seven specialty Managing General Underwriters (MGUs) with a presence in the United States and India. The firm specializes in a range of insurance products, including environmental, professional liability, and commercial auto liability, among others.
Tim Turner, CEO of Ryan Specialty, praised Innovisk's management and underwriting teams for their industry-leading capabilities and commitment to product innovation and market responsiveness. Turner highlighted the alignment in values between the two firms, particularly regarding product innovation and diversification.
Miles Wuller, Chairman and CEO of RSUM, echoed Turner's sentiments, commending Innovisk's operational efficiency and data-driven underwriting, which have fostered strong carrier relationships and favorable loss ratios. Wuller expressed confidence that the acquisition would bolster the growth trajectories of both Ryan Specialty and Innovisk.
David Thomas, CEO of Innovisk, expressed enthusiasm about joining Ryan Specialty, citing the company's leadership and platform as key to furthering Innovisk's growth. He also acknowledged the support of Abry Partners and BHMS Investments, LP, the current owners of Innovisk.
The financial terms of the deal have not been disclosed, and while the acquisition is expected to close soon, there is no certainty until the final agreements are signed. Innovisk reported operating revenues of approximately $58 million for the 12-month period ending July 31, 2024.
Ardea Partners is acting as the exclusive financial advisor to Innovisk, while Insurance Advisory Partners LLC is advising Ryan Specialty. This strategic acquisition aligns with Ryan Specialty's mission to deliver innovative specialty insurance solutions to brokers, agents, and carriers.
This report is based on a press release statement.
In other recent news, Ryan Specialty Group has made significant financial strides. The company reported an 18.8% increase in total revenue for Q2 2024, reaching $695 million. On the mergers and acquisitions front, Ryan Specialty recently acquired the Property and Casualty managing general underwriters from Ethos Specialty Insurance and certain assets from Geo Underwriting Europe BV.
BMO Capital Markets upgraded Ryan Specialty's stock to Outperform from Market Perform, increasing the price target to $75.00. This reflects a positive long-term outlook despite potential short-term challenges such as competition from Marsh & McLennan Companies and Aon (NYSE:AON). Barclays also initiated coverage on Ryan Specialty Group, assigning it an Overweight rating.
In terms of financing, Ryan Specialty has successfully negotiated a refinancing of its existing term loan, increasing its term loan facility to $1.7 billion. The company also upsized its senior notes offering to $600 million, with the proceeds expected to repay a portion of the borrowings under the company's revolving credit facility.
Finally, Ryan Specialty announced a leadership succession, with Tim Turner stepping in as CEO, Jeremiah Bickham as President, and Janice Hamilton as CFO. These are the recent developments in the company's operations, demonstrating its ongoing commitment to strategic growth and financial performance.
InvestingPro Insights
As Ryan Specialty Group (NYSE: RYAN) approaches the completion of its Innovisk Capital Partners acquisition, recent financial data from InvestingPro sheds light on the company's current position and potential growth trajectory.
Ryan Specialty has demonstrated strong financial performance, with revenue growth of 19.87% over the last twelve months as of Q2 2024, reaching $2.22 billion. This robust growth aligns well with the company's strategic move to acquire Innovisk, which is expected to further enhance its underwriting capabilities and market presence.
The company's profitability is also noteworthy, with an adjusted operating income of $450.19 million and an operating income margin of 20.24% for the same period. This solid financial foundation provides Ryan Specialty with the resources to pursue strategic acquisitions like Innovisk.
InvestingPro Tips highlight that Ryan Specialty's net income is expected to grow this year, which could be partly attributed to the anticipated synergies from the Innovisk acquisition. Additionally, the company has been profitable over the last twelve months, reinforcing its financial stability as it expands its operations.
It's worth noting that Ryan Specialty is trading at a high P/E ratio of 103.64, which may reflect investor optimism about the company's growth prospects, including the potential impact of the Innovisk acquisition. However, this also suggests that the market has high expectations for the company's future performance.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 8 more InvestingPro Tips available for Ryan Specialty, providing a deeper understanding of the company's financial health and market position.
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