Ryan Specialty paid $30.5 million cash for USQRisk, Pat Ryan points to 'very robust' M&A pipeline

By Chris Munro

May 2 - (The Insurer) - Ryan Specialty has disclosed that it paid around $30.5 million of cash consideration for USQRisk Holdings, while founder Pat Ryan stated that the company's M&A pipeline remains “very robust”.

The firm is eyeing up small, midsized and large deals amid what the Ryan Specialty executive chairman said is “more of a buyers’ market than we’ve had”.

Talking to analysts after Ryan Specialty published its first-quarter earnings on Thursday, Ryan noted that M&A contributed 13 percentage points of the group's revenue growth of 25% for the three-month period.

“This is our largest contribution from M&A in over three years,” Ryan said on the analyst call.

“Our robust M&A activity over the past two years and since our founding has advanced various aspects of our strategy, notably, significantly expanding our total addressable market,” Ryan noted.

Ryan Specialty in 2025 has completed deals for USQRisk and Velocity Risk Underwriters.

In its 10-Q filing on Friday, Ryan Specialty disclosed that it paid around $30.5 million in cash for USQRisk, which underwrites, structures, prices and places specialty insurance for corporate clients seeking bespoke, multiyear risk solutions. It added that the acquisition will also include contingent consideration in its final purchase price.

It also disclosed that it paid $16.6 million of cash consideration for its previously announced 9.9% interest in Velocity Specialty Insurance Company. Ryan Specialty had previously disclosed that it paid $525 million cash for cat-focused MGU Velocity Risk Underwriters.

Ryan Specialty completed seven acquisitions in 2024, on top of five deals in 2023.

And the company’s M&A streak is set to continue.

“On the M&A front, our pipeline continues to be robust, including small, midsized and large deals,” said Ryan Specialty’s CEO Tim Turner.

“We have tremendous opportunities in small, medium-sized acquisitions and some very large ones as well,” he noted.

“We remain very optimistic on our opportunities going forward. The market itself is very frothy, and we're excited about the opportunities in '25,” Turner added.

However, Turner noted that Ryan Specialty will only move forward on deals when all of the company’s criteria for M&A are met, noting that potential acquisitions must be strategic, accretive and have a strong cultural fit.

Ryan said the company is evaluating M&A opportunities to find those that are the best strategic fit and which provide the greatest ability to multiply the acquisition into strong organic growth afterwards.

He added that the current M&A environment is now more favourable to buyers than it has been.

Ryan highlighted private equity firms’ various plays in the sector, along with what he described as an “aggressive new competitor” on the M&A front in Stone Point-backed CRC.

But he added: “It's much more of a buyers’ market today than it's been. That doesn't mean that multiples will come down dramatically at all.

“We buy quality firms and quality firms that tend to command a higher multiple, but we've been quite successful in cost synergies, particularly revenue synergies where if we have to pay a multiple that's a bit higher than we would like, we've been able to buy those down pretty quickly,” said Ryan.

From a capital allocation perspective, Ryan Specialty executive vice president and chief financial officer Janice Hamilton said “M&A remains our top priority now and for the foreseeable future”.

As Hamilton explained, Ryan Specialty ended Q1 2025 at 3.8x total net leverage on a credit basis, a ratio that reflects the company’s acquisition of Velocity and seasonal working capital needs during the three-month stretch.

“While this is at the high end of our leverage comfort corridor of 3x to 4x, we do remain willing to temporarily go above our comfort corridor for M&A that meets our criteria,” Hamilton said.

Ryan Specialty’s CFO said that absent a significant amount of further M&A, the company expects to “significantly de-lever” by year-end.

“We would expect that to tick back down in Q1 of next year,” Hamilton said.

“Overall, we have ample capacity to execute on significant M&A opportunities. And we said that we would be willing to go above 4x temporarily for the right deal.

“But in light of the fact that expecting significant deleverage based on our strong growth and free cash flow, we have significant amounts of financial flexibility in order to meet the pipeline needs,” she added.