Ryan Specialty Signs Definitive Agreement To Acquire Velocity Risk Underwriters

Ryan Specialty, LLC (“Ryan Specialty”, NYSE: RYAN), a leading international specialty insurance firm, announced it has signed a definitive agreement to acquire Velocity Risk Underwriters, LLC (“VRU”) from funds managed by Oaktree

• VRU to be acquired for an upfront cash consideration of $525 million, subject to customary purchase price adjustments
  • The upfront cash consideration is exclusive of Velocity Specialty Insurance Company (“VSIC”) and any earnout consideration
• VRU will become a part of the Ryan Specialty Underwriting Managers division of Ryan Specialty

As a component of this transaction, and subject to regulatory approval, Velocity Insurance Holding Company, Inc.’s (“Velocity Holdco”) wholly owned E&S carrier, VSIC, will be acquired by Factory Mutual Insurance Company (“FM”)

Velocity was founded in 2015 to focus on US property catastrophe risks

• Velocity Holdco is the holding company for VRU, a tech-enabled E&S specialty property insurance managing general agent, VSIC, a rated E&S insurance carrier licensed in all 50 states, and Velocity Claims LLC, a leading claims management service
• Leading provider of risk management solutions, with a focus on delivering tailored specialty insurance coverage for complex commercial exposures
  • Provides hard to secure coverage for perils such as named storm, earthquake, and tornado and hail
  • Emphasis on middle market and small to medium commercial businesses
  • National footprint with a particularly strong presence in Florida, Texas, and the Southeast
• Through strategic partnerships and a commitment to innovation, Velocity strives to offer industry-leading service and risk solutions for its clients and partners
• Has over 150 employees across five global locations: Nashville (headquarters), Atlanta, Birmingham, Chicago, and the UK

Founded in 2010, Ryan Specialty is a service provider of specialty products and solutions for insurance brokers, agents, and carriers

• Provides distribution, underwriting, product development, administration, and risk management services
  • By acting as a wholesale broker and a managing underwriter with delegated authority from insurance carriers
• Mission to provide industry-leading innovative specialty insurance solutions for insurance brokers, agents and carriers
• Ryan Specialty has a market capitalization of ~$16bn as of 1/3/25

Established nearly two centuries ago, FM is a leading commercial property mutual insurance company

• Capital, scientific research capability and engineering expertise are solely dedicated to property risk management and the resilience of its policyholder-owners
• Policyholder-owners represent many of the world’s largest organizations, including one of every four Fortune 500 companies
• FM has statutory Capital & Surplus of ~$24bn as of 9/30/24

Oaktree is a leader among global investment managers specializing in alternative investments, with ~$205bn in AUM as of September 30, 2024

• Emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, equity, and real estate
• Has over 1,200 employees and offices in 23 cities worldwide

Advised Oaktree in its acquisition of Velocity in 2022 and maintained a broad advisory relationship throughout Oaktree’s ownership period of Velocity

HCMA is acting as financial advisor to Velocity and Oaktree; key roles and responsibilities include:

• Assistance in presenting Velocity’s financials
• Assistance with due diligence
• Providing guidance on key transaction documents
• Advising on negotiating key transaction terms and conditions
• Providing objective advice and acting as a confidant to Velocity and Oaktree throughout the process

(a)  The upfront cash consideration is exclusive of VSIC and any earnout consideration.