Chicago-based wholesale insurance broker Ryan Specialty Group Holdings, Inc. announced the pricing of its initial public offering of 57 million shares of its Class A common stock at a price to the public of $23.50 per share for gross proceeds of $1,337.6 million.
The shares are expected to begin trading on the New York Stock Exchange today, July 22, 2021, under the symbol “RYAN.” The offering is expected to close on July 26, 2021, subject to the satisfaction of customary closing conditions.
All shares of Class A common stock are being offered by Ryan Specialty. Additionally, Ryan Specialty has granted the underwriters a 30-day option to purchase up to an additional 8,537,742 shares of its Class A common stock at the initial public offering price, less underwriting discounts and commissions.
Upon completion of the initial public offering, Ryan Specialty will be the sole managing member of Ryan Specialty Group, LLC and will exclusively operate and control all of its business and affairs.
Ryan Specialty expects to receive net proceeds of approximately $1,259.1 million after deducting underwriting discounts and commissions and estimated expenses. The firm said it intends to use the proceeds to acquire newly issued LLC units of Ryan Specialty Group, the equity of an entity through which an affiliate of Onex Corp. holds its preferred unit interest in Ryan Specialty Group, and outstanding LLC units of Ryan Specialty Group from certain existing holders of LLC units.
According to its SEC filing, RSG is the second-largest U.S. property/casualty insurance wholesale broker and the third-largest U.S. property/casualty managing general agency and underwriter. Its distribution network has more than 650 producers who have access to more than 15,500 retail insurance firms and over 200 excess and surplus lines carriers.
Since 2010, RSG has completed 40 acquisitions in various specialties and geographies. In September 2020, RSG acquired All Risks Specialty, the fourth largest wholesale distributor. RSG says the All Risks acquisition advanced many of its strategic priorities and enhanced its competitive position. The firm is currently merging All Risks Specialty’s binding authority service model and premium scale with its own technology platform, The Connector, through which retail clients can receive quotes and bind policies online.
For the years ended December 31, 2020 and 2019, RSG generated:
|•||Revenue of $1,018.3 million and $765.1 million, respectively;|
|•||Total revenue growth of 33.1% and 25.3%, respectively; and|
|•||Organic Revenue Growth Rate of 20.4% and 17.5%, respectively.|
RSG said its financial performance includes a 49.6% and 33.1% increase in revenue from March 31, 2020 to March 31, 2021 and 2019 to 2020, respectively. Despite the rapid pace of growth, while its net income margin decreased due to costs primarily associated with the All Risk acquisition, the broker was able to expand its adjusted net income margin and adjusted EBITDAC margin from March 31, 2020 to March 31, 2021 and December 31, 2019 to December 31, 2020.
Ryan Specialty registered with the Securities and Exchange Commission for an IPO in June. A registration statement on Form S-1 relating to these securities has been filed with the SEC and became effective on July 21.
J.P. Morgan, Barclays, Goldman Sachs & Co. and Wells Fargo Securities are acting as lead book-running managers, and UBS Investment Bank, William Blair, RBC Capital Markets, BMO Capital Markets and Keefe, Bruyette & Woods are acting as book-running managers for the offering. Dowling & Partners Securities, Wolfe|Nomura Strategic Alliance, Capital One Securities, CIBC Capital Markets, Loop Capital Markets, PNC Capital Markets, Ramirez & Co., Inc. and Siebert Williams Shank are acting as co-managers for the offering.
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