Ryan Specialty subsidiary to issue $500 million in senior notes

CHICAGO - Ryan Specialty Holdings, Inc. (NYSE: RYAN), a global specialty insurance organization, disclosed on Monday its plans for a private offering of senior secured notes by its indirect subsidiary, Ryan Specialty, LLC. The offering aims to raise $500 million in aggregate principal amount, with notes maturing in 2032.

The proceeds from the sale of these notes are intended to repay part of the borrowings under the Company's Revolving Credit Facility. These funds were previously utilized, along with cash on hand, for the acquisition of US Assure Insurance Services of Florida, Inc. Additionally, the proceeds will cover fees and expenses related to the offering.

The notes will be guaranteed by the Company’s wholly owned subsidiaries that also back its obligations under its credit agreement. However, they will not be guaranteed by Ryan Specialty itself. The notes are expected to be secured by a first lien on substantially all assets that currently secure the Company's existing notes, as well as its senior secured term loan and Revolving Credit Facility.

The offering targets qualified institutional buyers, in line with Rule 144A under the Securities Act, and non-U.S. persons pursuant to Regulation S. The notes will not be registered under the Securities Act of 1933, as amended, and they will not be available for sale in the United States or to U.S. persons without registration or an exemption from registration requirements.

Ryan Specialty, founded in 2010, operates as a wholesale broker and managing underwriter, providing specialized insurance products and services to brokers, agents, and carriers. The Company emphasizes its role in distribution, underwriting, product development, administration, and risk management services.

The announcement includes forward-looking statements regarding the anticipated use of proceeds from the note offering. However, Ryan Specialty cautions that actual outcomes may vary due to risks and uncertainties. This press release is based on a press release statement and is not an offer to sell or a solicitation of an offer to buy any security.

In other recent news, Ryan Specialty Group has reported a notable 18.8% increase in total revenue for Q2 2024, reaching $695 million. The firm has also entered into definitive agreements to acquire the Property and Casualty (P&C) managing general underwriters from Ethos Specialty Insurance, a subsidiary of Ascot Group Limited, and certain assets from Geo Underwriting Europe BV, a subsidiary of The Ardonagh Group. These acquisitions are expected to be finalized in September 2024 and the third quarter of the year, respectively.

Furthermore, Barclays initiated coverage on Ryan Specialty Group, assigning an Overweight rating and setting a price target of $76.00. This rating is based on the firm's positive outlook on Ryan Specialty Group, driven by several key factors such as the ongoing strong market for casualty pricing and a growing economic moat amid the ongoing consolidation within the wholesale brokerage sector.

In terms of leadership, Ryan Specialty announced a succession with Tim Turner stepping in as CEO, Jeremiah Bickham as President, and Janice Hamilton as CFO. The company has also formed strategic partnerships with MagMutual and Private Client Select. These recent developments reflect the firm's strategic growth initiatives and financial performance.

InvestingPro Insights

Ryan Specialty Holdings, Inc. (NYSE: RYAN) is positioning itself for financial maneuverability with its latest private offering of senior secured notes. As the company targets a strategic refinancing of its Revolving Credit Facility, it's important to consider the company's current financial health and market performance, illuminated by real-time data from InvestingPro.

InvestingPro Data reveals a robust market capitalization of $16.74 billion and a significant Price/Earnings (P/E) ratio of 95.94, which suggests a high valuation by the market relative to its earnings. The adjusted P/E ratio looking back over the last twelve months as of Q2 2024 is marginally lower at 69.52, but this still indicates that investors are willing to pay a premium for the company's earnings potential. Additionally, the company's revenue growth over the last twelve months as of Q2 2024 stands at an impressive 19.87%, reflecting a strong upward trajectory in its financial performance.

InvestingPro Tips highlight that analysts are optimistic about Ryan Specialty's future, with eight analysts revising their earnings projections upwards for the upcoming period. This sentiment is reinforced by the prediction that the company will be profitable this year, continuing the trend from the last twelve months. Moreover, the company has demonstrated a strong return over the last five years, which could instill confidence in potential investors considering the notes offering.

For readers interested in a deeper analysis, there are additional InvestingPro Tips available, which can offer further insights into Ryan Specialty's financial outlook and market positioning. These additional tips can be accessed through the company's dedicated page on InvestingPro at https://www.investing.com/pro/RYAN.

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