Acrisure Holdings Inc.

The stable outlook reflects our expectation for robust top-line growth through 2021 (15%-20%) stemming from mergers and acquisitions (M&A) and stable EBITDA margins of 30%-35%, producing growing earnings and absolute cash-flow generation. We expect a pro forma adjusted debt to EBITDA ratio of 7x-8x area (11x–12x, excluding preferred equity) and adjusted cash interest coverage above 2x. We could lower the ratings in the next 12 months if Acrisure sustains pro forma adjusted leverage above 8x (excluding preferred equity) or if cash interest coverage falls sustainably below 2x. This could occur if management takes a more-aggressive approach to financial policy than we anticipate and/or through performance deterioration. We could also lower the rating if the company's business profile weakens as shown

...Acrisure is one of the largest and fastest growing brokers in the U.S. due to strong organic growth and acquisitive growth strategy. Acrisure Holdings Inc. has positioned itself well in the sector and among its competitors while leveraging industry and technical specialization for further organic growth. Its acquisition strategy is well suited for its needs because it quickly integrates and does not change business operations, reducing risk of lost business. Acrisure offers a range of products and services focused on the U.S. middle-market brokerage segment. We view the company's business strategy as narrowly focused, though generally well supported by a range of property/casualty (P/C), specialty insurance and employee benefit products and services. Its top 10 clients account for less than 2% of revenues. Acrisure operates in a fragmented marketplace where only the top 3 players have greater than 5% market share. Acrisure and other regional peers have a greater degree of competition compared...

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