Acrisure Holdings Inc.

The stable outlook indicates S&P Global Ratings is unlikely to change the rating in the next 12 months. It reflects our expectation that Acrisure will achieve 15%-25% top-line growth through 2024 with an EBITDA margin in the 30% range (per our calculations). If Acrisure achieves our forecast, we expect reported revenue to grow to about $5.0 billion, pro forma adjusted financial leverage to be 5.5x–6.5x (9.5x–10.5x including payment-in-kind [PIK] preferred shares treated as debt), and adjusted EBITDA cash interest coverage to be near 2.0x through 2024. We could lower our ratings in the next 12 months if pro forma adjusted financial leverage were to rise and remain above 8x (above 12x including PIK preferred shares treated as debt) or if

...Acrisure is well established as a leading middle-market insurance broker consolidator. Through a combination of internal growth and acquisitions, it has profitably expanded its competitive position across its key segments, primarily in the domestic U.S. marketplace. Acrisure also operates in the U.K. and the EU (collectively 10% of total revenue). The company does business in a fragmented and highly competitive sector, is exposed to operational risks, and uses debt-funded acquisitions to execute its growth strategy. Its dependence on the insurance industry for revenue makes it susceptible to cyclical property/casualty insurance pricing and macroeconomic risks. Key operational risks include reputational factors, data systems integrity, and regulatory compliance. In addition, we believe Acrisure's primarily debt-funded, acquisition-driven growth strategy could lead to integration challenges and assumption realization shortfalls....

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