–
–
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
Netherlands based specialty insurance company, Brit Plc announced today announced the successful pricing of its initial public offering on the London Stock Exchange.
Brit had initially commenced its offering on March 4th, and has now sold 100 million of its ordinary shares held by selling shareholders, Apollo Global Management and CVC Capital Partners, representing 25% of the company’s capital stock.
At about US$4 per share (£2.40 per share), the selling shareholders will receive gross proceeds of US$400 million (£240 million), prior to exercise of shares under a maximum 10% over allotment option granted to the underwriters, and before the fees and expenses of the issue.
Accordingly Brit commenced trading, initially at its total issue total market capitalization of about US$1.6 billion (£960 million) though has slipped a little since as of the time of writing.
The successful Brit flotation also represents another example of former private equity privatization deals now coming back to the market. Apollo Global Management and CVC Capital had first agreed to acquire Brit Plc and take it private in October 2010. They ultimately paid US$1.47 billion (£888 million) for it altogether, and cancelled the listing a few months later in March 2011 when they declared their offer unconditional.
Accordingly with this partial realisation they are just above break even, after a three year hold period, so on the surface it might perhaps not seem a great win for them this time. Of course they do have a liquid vehicle again. And in addition, including special dividends, Brit has paid out over US$900 million (£542 million) in dividends to them since acquisition – alone representing over 60% of the total purchase price.
As a regulated industry the company’s gearing ratio, at 23% reflects industry norms, and accordingly does not indicate a whole lot of acquisition financing was thrust onto the balance sheet after it was acquired, so it was left to dividends to provide the bulk of their pay back.
Mark Cloutier, the chief executive of Brit said “I am pleased that our offering has been well received by investors, ” adding “Having transformed Brit into a successful global specialty insurer operating solely through Lloyd’s of London, we have built a strong foundation for future profitable growth and continued success.”
Since going private, the company got rid of a number of peripheral business lines, including its UK general insurance business, using some of the cash raised to pay almost US$450 million (£270 million) in special dividends. The company now focuses on specialty insurance and reinsurance lines, operating mostly through Lloyds of London. In 2013 Brit made a profit of nearly US$170 million (£102 million).
While today’s new offering has clearly been a success, it nevertheless sold at near the bottom of the expected range of about US$3.80 US$4.50 (£2.30 to £2.75) initially hoped for during the marketing phase of the offering.
JP Morgan Cazenove was the Sponsor and Global coordinator of the IPO and, together with UBS, were Lead Underwriters, or ‘Bookrunners” as they call it there. Canaccord Genuity and Numis were Co-Lead Managers of the offering.
About Apollo Global Management
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately US$160 billion as of December 31st, 2013, in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources.
Apollo is Chaired by its founder Leon Black.
–
