Ryan Specialty Group

Aug 10, 2023

August 10, 2023 07:00 ET All amounts in U.S. dollars unless otherwise stated TORONTO, Aug. 10, 2023 (GLOBE NEWSWIRE) -- Onex Corporation (TSX: ONEX) today announced its financial results for the second quarter and six months ended June 30, 2023. “We continue to make steady progress on our strategic objectives,” said Bobby Le Blanc, Chief Executive Officer. “In the last few months, we have successfully realized several investments, closed our first continuation vehicle, and taken measured steps to reduce our cost structure and drive more consistent profitable growth. Together with our strong liquidity, we are well positioned to capitalize on the organic and inorganic opportunities before us.” Financial Results Three Months Ended $ $ $ $ $ Q2 Highlights Onex’ investing capital per fully diluted share(6) increased 9% during the 12 months ended June 30, 2023 and 3% from the previous quarter ended March 31, 2023. Onex had approximately $7.9 billion of investing capital, or $98.87 (C$130.91) per fully diluted share at June 30, 2023. In Canadian dollars, investing capital per fully diluted share increased 12% over the last 12 months and 1% from the previous quarter ended March 31, 2023. The value of Onex’ private equity investments increased 3% in the second quarter of 2023(7) (Q2 2022: 3% decrease). Investments in Credit strategies generated a net gain of $27 million or a return of 4% in the second quarter of 2023(8) (Q2 2022: net loss of $44 million or a loss of 6%). In August, Onex sold Ryan, LLC to a single-asset continuation fund for net proceeds to Onex of approximately $117 million. Onex will manage approximately $600 million of fee-generating assets under management (“FG AUM”)(9) in the continuation fund for recurring management fees and a carried interest opportunity. Onex completed the sale of approximately 8.2 million Class A common shares of Ryan Specialty Group and 11.9 million subordinate voting shares of Celestica for aggregate net proceeds of $460 million. In August, an additional 6.7 million subordinate voting shares of Celestica were sold for $133 million in net proceeds to Onex. Onex repurchased 860,694 Subordinate Voting Shares (SVS) in the second quarter and an additional 722,686 SVS in July 2023 for a total of $84 million (C$112 million) or an average cost per share of $53.25 (C$70.79). Onex priced its twenty-eighth U.S. CLO and third issuance this year for approximately $440 million in fee generating assets. Onex incurred a $15 million restructuring expense in connection with a reorganization of the Onex Partners platform and actions to optimize general corporate support functions. In July, Onex invested $157 million as part of the ONCAP IV and ONCAP V Groups’ investment in Biomerics. In addition, Onex invested approximately $80 million as part of the ONCAP V Group’s investment in Education Holding Corporation, a provider of before and after school care to students in the United States. As of June 30, 2023, Onex had $34.3 billion of FG AUM. Run-rate management fees(10) from this capital were $251 million. Unrealized carried interest was $211 million at June 30, 2023. Onex’ cash and near-cash(11) balance was $1.5 billion or 20% of Onex’ investing capital as of June 30, 2023 (December 31, 2022 – $1.1 billion or 13% of Onex’ investing capital). Webcast Onex management will host a webcast to review Onex’ second quarter 2023 results on Thursday, August 10, 2023 at 11:00 a.m. ET. The webcast will be available in listen-only mode from the Presentations and Events section of Onex’ website, https://www.onex.com/events-and-presentations . A 90-day on-line replay will be available shortly following the completion of the event. Additional Information Enclosed are supplementary financial schedules related to Onex’ consolidated net earnings (loss), investing capital, fee-related earnings (loss), distributable earnings, and cash and near-cash changes for the three and six months ended June 30, 2023. The financial statements prepared in accordance with International Financial Reporting Standards (IFRS), including Management’s Discussion and Analysis of the results, are posted on Onex’ website, www.onex.com , and are also available on SEDAR at www.sedar.com . A supplemental information package with additional information is available on Onex’ website, www.onex.com . About Onex Onex is an investor and asset manager that invests capital on behalf of Onex shareholders and clients across the globe. Formed in 1984, we have a long track record of creating value for our clients and shareholders. Onex’ two primary businesses are Private Equity and Credit. In Private Equity, we raise funds from third-party investors, or limited partners, and invest them, along with Onex’ own investing capital, through the funds of our private equity platforms, Onex Partners and ONCAP. Similarly, in Credit, we raise and invest capital across several private credit, public credit and public equity strategies. Our investors include a broad range of global clients, including public and private pension plans, sovereign wealth funds, insurance companies and family offices. In total, Onex has $49.5 billion in assets under management, of which $7.9 billion is Onex’ own investing capital. With offices in Toronto, New York, New Jersey, Boston and London, Onex and its experienced management teams are collectively the largest investors across Onex’ platforms. Onex is listed on the Toronto Stock Exchange under the symbol ONEX. For more information on Onex, visit its website at www.onex.com . Onex’ security filings can also be accessed at www.sedar.com . Forward-Looking Statements This press release may contain, without limitation, statements concerning possible or assumed future operations, performance or results preceded by, followed by or that include words such as “believes”, “expects”, “potential”, “anticipates”, “estimates”, “intends”, “plans” and words of similar connotation, which would constitute forward-looking statements. Forward-looking statements are not guarantees. The reader should not place undue reliance on forward-looking statements and information because they involve significant and diverse risks and uncertainties that may cause actual operations, performance or results to be materially different from those indicated in these forward-looking statements. Except as may be required by Canadian securities law, Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. These cautionary statements expressly qualify all forward-looking statements in this press release. Non-GAAP Financial Measures This press release contains non-GAAP financial measures and ratios which have been calculated using methodologies that are not in accordance with IFRS. The presentation of financial measures in this manner does not have a standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar financial measures presented by other companies. Onex management believes these financial measures and ratios provide helpful information to investors. Reconciliations of the non-GAAP financial measures to information contained in the consolidated financial statements have been presented where practical. For Further Information: 1,053 (i) Excludes cash and cash equivalents allocated to the asset management segment related to accrued incentive compensation ($63 million (December 31, 2022 – $122 million)) and contingent consideration related to the acquisition of Onex Falcon ($57 million (December 31, 2022 – $57 million)). (ii) Includes restricted cash and cash equivalents of $84 million (December 31, 2022 – $2 million) for which the Company can readily remove the external restriction or for which the restriction will be removed in the near term. Excludes cash and cash equivalents for Onex’ share of uncalled expenses payable by the Investment Holding Companies of $36 million (December 31, 2022 - $27 million). (iii) Includes management fees and recoverable fund expenses receivable from certain funds which Onex has elected to defer cash receipt from. At December 31, 2022, the amount presented is net of amounts allocated to the asset management segment related to accrued incentive compensation and contingent consideration related to the acquisition of Falcon Investment Advisors. (iv) Subscription financing receivable attributable to a private equity investment and to third-party investors in certain Credit Funds. The table below provides a reconciliation of the change in cash and near-cash from December 31, 2022 to June 30, 2023. (Unaudited)($ millions) (1) Refer to pages 19, 20 and 21 of Onex’ Q2 2023 Interim MD&A for further details concerning the composition of segment net earnings (loss). A reconciliation of total segment net earnings (loss) to net earnings (loss) is provided in the supplementary financial schedules in this press release. (2) Refer to the glossary in Onex’ Q2 2023 Interim MD&A for details concerning the composition of fully diluted shares. (3) Asset management fee-related earnings (loss) excludes Onex’ public company expenses and other expenses associated with managing Onex’ investing capital and is a component of total fee-related earnings (loss). (4) Total fee-related earnings (loss) is a non-GAAP financial measure that does not have a standardized meaning prescribed under International Financial Reporting Standards (“IFRS”). Therefore, it may not be comparable to similar financial measures disclosed by other companies. The most directly comparable financial measure under IFRS to fee-related earnings (loss) is Onex’ net earnings (loss). Refer to the 2023 Year-To-Date Results & Activity section of Onex’ Q2 2023 Interim MD&A and the supplementary financial schedules in this press release for further details concerning fee-related earnings (loss). (5) Distributable earnings is a non-GAAP financial measure that does not have a standardized meaning prescribed under IFRS. Therefore, it may not be comparable to similar financial measures disclosed by other companies. The most directly comparable financial measure under IFRS to distributable earnings is Onex’ net earnings (loss). Refer to the 2023 Year-To-Date Results & Activity section of Onex’ Q2 2023 Interim MD&A and the supplementary financial schedules in this press release for further details concerning distributable earnings. (6) Refer to the glossary in Onex’ Q2 2023 Interim MD&A for details concerning the composition of investing capital per share. The percentage changes in investing capital per share exclude the impact of capital deployed in Onex’ asset management segment, where applicable, and dividends paid by Onex. (7) The gross return on Onex’ private equity investments is a non-GAAP ratio calculated using methodologies that are not in accordance with IFRS. The presentation of this ratio does not have a standardized meaning prescribed under IFRS and therefore may not be comparable to similar financial measures presented by other companies. The net gains (losses) used to calculate the gross return of Onex’ private equity investments are gross of management incentive programs. Refer to page 9 of Onex’ Q2 2023 Interim MD&A for further details concerning the gross performance of Onex’ private equity investments. (8) The percentage returns on Credit investments have been adjusted for capital deployed, realizations and distributions (9) Refer to the glossary in Onex’ Q2 2023 Interim MD&A for details concerning the composition of FG AUM. (10) Refer to the glossary in Onex’ Q2 2023 Interim MD&A for details concerning the composition of run-rate management fees. (11) Cash and near-cash is a non-GAAP financial measure calculated using methodologies that are not in accordance with IFRS. The presentation of these measures does not have standardized meaning prescribed under IFRS and therefore might not be comparable to similar financial measures presented by other companies. The most directly comparable financial measure under IFRS to cash and near-cash is Onex’ consolidated cash and cash equivalents balance, which was $645 million at June 30, 2023 (December 31, 2022 - $111 million). Refer to the Cash and Near-Cash section of Onex’ Q2 2023 Interim MD&A and the supplementary financial schedules in this press release for further details concerning Onex’ cash and near-cash.