Verisk to fund growth via cash flow, through strong capital structure

By Devika Patel

Knoxville, Tenn., Nov. 15 – Verisk Analytics, Inc. believes its free cash flow is sufficient to fund any opportunities that arise – and the company’s strong capital structure will allow it to find funding for any growth opportunities that might be beyond its cash flow.

“What we’re trying to aim to do is continue to drive leading organic growth, have a strong capital structure to fund that, to fund any opportunities that might be above and beyond our cash flow in the moment, deliver good returns on our M&A spend and also return capital to shareholders,” senior vice president and chief financial officer Eva F. Huston said at the J.P. Morgan Ultimate Services Investor Conference on Tuesday.

“In terms of the capital structure, we’re leveraged about two times debt to EBITDA today.

“We talk about our steady state being about two and a half times, we have covenants of three and a half times and we have from time to time taken our leverage up in order to capitalize on opportunities.

“When we bought Wood Mackenzie in 2015, we took our leverage up to 3.4 times and we’re already 18 months out back down to 2.1 times.

“We’re an investment-grade company and we have a nice capital structure in term of available bank debt and bond maturities that are out quite in the distance, so we feel good about the combination of that and our free cash flow allowing us to invest when we see the right opportunities,” Huston said.

Verisk is a risk analysis and management company based in Jersey City, N.J.

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