Fortegra Group (The) (FTG) to Raise $297 Million in IPO

Fortegra Group (The) (FTG) is planning to raise $297 million in an IPO on Thursday, February 8th, IPO Scoop reports. The company will be issuing 18,000,000 shares at a price of $15.00-$18.00 per share.

In the last 12 months, Fortegra Group (The) generated $1.5 billion in revenue and $82 million in net income. Fortegra Group (The) has a market cap of $1.4 billion.

Goldman Sachs, J.P.Morgan, Jefferies, Barclays, JMP Securities, Keefe, Bruyette & Woods (Stifel), Piper Sandler and Raymond James served as the underwriters for the IPO.

Fortegra Group (The) provided the following description of their company for its IPO: “We are a multinational specialty insurance company focused on underwriting complex and niche risks in underserved markets. (Incorporated in Delaware) We are a growing, highly profitable and multinational specialty insurance company focused on underwriting complex and niche risks in underserved markets. Founded in 1978, we have a long-standing track record of disciplined and stable underwriting results while generating strong growth and attractive returns on capital. We are an underwriting-focused company, with deep expertise within the admitted and excess and surplus (“E&S”) insurance lines and capital light fee-based services markets. We target moderate risk limits and utilize a sophisticated reinsurance strategy to reduce volatility and protect our capital. We believe we win through our differentiated go-to-market strategy, our expertise in customized underwriting solutions and the value-added services we offer to our distribution partners. Our financial success is demonstrated through our GWPPE compound annual growth rate (“CAGR”) of 27%, average combined ratio of 91%, average ROAE of 15% and average adjusted ROAE of 21%, each measured since 2019 through September 30, 2023. Our business mix is the result of a focus on building a diversified and complementary portfolio. When our current Chief Executive Officer, Rick Kahlbaugh, joined Fortegra in 2003 as Chief Operating Officer, our business was oriented as a monoline insurance company with a narrow geographic footprint. Through strategic and focused decisions over the last 20 years, we have grown into a highly profitable, diversified and scaled multinational specialty insurer with over $3 billion GWPPE for the twelve months ended September 30, 2023. Our balanced business mix allows us to opportunistically allocate capital as market conditions change and utilize the cash flows generated through our capital light, fee-based businesses to partially fund the growth capital required across our insurance businesses. We have proven our ability to opportunistically take advantage of market dynamics throughout our history, and we believe we are well positioned to benefit from an increasingly complex world leading to secular growth in the specialty property & casualty (“P&C”) market. Our underwriting-focused business consists of: Admitted insurance – 44 percent of our gross written premiums and premium equivalents (GWPPE) for the nine months that ended Sept 30, 2023; Excess and surplus insurance – 27 percent of our GWPPE for the nine months that ended Sept. 30, 2023, , and Capital light fee-based services – 29 percent of GWPPE for the nine months that ended Sept. 30, 2023. We offer general liability, professional liability, property and other short-tail coverages, contractual liability protection, and alternative risks products. Primarily, we offer: –General Liability, including but not limited to, general and occurrence-basis other liability; commercial multi-peril liability; –Professional Liability, including but not limited to, professional and claims-made other liability; miscellaneous errors & omissions; cyber liability; –Property and Other Short-Tail, including but not limited to, commercial auto physical damage; commercial property; earthquake; homeowners; and inland marine; –Contractual Liability Protection (“CLIP”), within portions of our auto & consumer goods warranty services lines, we provide embedded CLIP); –Alternative Risks, including our credit insurance products designed to offer lenders protection from events that limit a borrower’s ability to make payments on outstanding loan balances. Our collateral protection products are designed to primarily protect the commercial entity from losses to collateral pledged to secure an installment loan. In most instances, these products offer lenders the option to protect collateral from a comprehensive loss due to fire, wind, flood and theft. Additionally, if the collateral is an automobile, the coverage protects against collision losses. In addition to commercial products, our distribution partners also offer a range of products which insure consumers, including credit protection surrounding loan payments. These products offer consumers the option to protect loan balance repayment in the event of death, involuntary unemployment or disability Additionally, while we have strategically and intentionally deemphasized non-standard auto coverage, we continue to offer these products on a limited basis through select partners. We classify services as our lines of business that generate service fees and other sources of income (excluding investment related income) through non-insurance services entities. We further present our services lines of business as those servicing auto warranty contracts and all other services. To align our economic interests with partners and reduce the volatility of our underwriting results related to various auto warranty, consumer warranty and motor club administration products, our distribution partners receive variable forms of commission based on underlying losses and overall program performance. In addition, we typically cede a substantial portion of the underwriting risk via third-party captive reinsurance arrangements. Note: Net income and revenue are for the year that ended Sept. 30, 2023.  (Note: The Fortegra Group filed an S-1/A dated Jan. 29, 2024, in which it disclosed the terms for its IPO: 18.0 million shares at a price range of $15.00 to $18.00 to raise $297 million. Background: The Fortegra Group filed an S-1/A on Dec. 19, 2023, in which it added underwriters to its joint book-runners’ team: JMP Securities, Keefe, Bruyette & Woods (Stifel), Piper Sandler and Raymond James.  The Fortegra Group filed its S-1 on Nov. 8, 2023, without disclosing terms for its IPO. The proposed symbol is “FTG” for a listing on the New York Stock Exchange.) (Background: The Fortegra Group previously filed an S-1 in March 2021. The proposed stock symbol was “FRF.” Fortegra disclosed terms in April 2021. The company, however, withdrew that IPO (before pricing) on April 29, 2021.)   “.

Fortegra Group (The) was founded in 1978 and has 1100 employees. The company is located at 10751 Deerwood Park Suite 200 Jacksonville, FL 32256 (866) 961-9529 and can be reached via phone at (866) 961-9529 or on the web at http://www.fortegra.com/.

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