Independent insurance distribution firm BRP Group Inc. could raise as much as $300 million in its initial public offering (IPO) of 16.4 million shares of its Class A common stock priced to the public at $14 per share.
The stock begins trading today on the Nasdaq Global Select Market under the ticker symbol BRP.
The $14 is at the lower end of the $14 to $16 range the company floated last month in announcing its plan to file an IPO with aim of raising $100 million. The underwriters for the offering also have a 30-day option to purchase up to 2.46 million additional shares.
BRP estimates that its net proceeds from this $14 per share offering will be approximately $228.8 million (or approximately $263.1 million if the underwriters exercise their option to purchase additional shares), after deducting underwriting discounts and commissions but before deducting estimated offering expenses.
At the offer price, the firm’s market value is about $908 million, according to analysts.
BRP, based in Tampa, Fla., was founded in 2011. It offers insurance and risk management products to 400,000 clients across the U.S. and internationally, with more than 40 offices in four states and 466 employees. The firm specializes in offering middle market products, including personal and commercial insurance, employee benefits for mid-to-large-sized businesses, as well as insurance for high net worth individuals.
In 2018, BRP was ranked the 43rd largest privately-held independent insurance agency in the U.S. by Insurance Journal. It moved up to number 33 on Insurance Journal’s Top 100 list in 2019. Its total property/casualty insurance revenue in 2018 was more than $62 million, with nearly $463 million in total premiums written. The company reported 5% premium growth in 2018.
According to its SEC filing of Oct. 11, 2019, the firm achieved an increase in commissions and fees from $48.0 million in 2017 to $79.9 million in 2018 and reported consolidated organic revenue growth of 18% in 2018. It achieved similar results in 2017, reaching 17% organic revenue growth.
The firm says it believes it is the “second fastest growing insurance broker” and that its ambition is to be one of the 10 largest insurance brokers in the country within the next 10 years.
BRP says its business has grown substantially since its founding in 2011 partly on the strength of its partnership model. It has added 25 brokers through acquisition to the firm since 2016 and is in active dialogue with more than 22 potential additional partners.
Despite the recent consolidation in the insurance brokerage industry, BRP believes the industry remains highly fragmented and this presents the opportunity to continue acquiring high-quality partners.
BRP said it will be one of the few insurance brokers that can offer new partners interests in a partnership that can be exchanged for stock of a public company (or cash of equivalent value) and offer a tax deferral mechanism, increasing the financial attractiveness of its platform to potential partners.
The company also credits its success to its targeting of growth regions and industries. A significant portion of its business is concentrated in the Southeast in many of the fastest growing states in the country including Florida and Texas. It has also targeted what it sees as fast-growing industries such as healthcare, technology, construction, hospitality, transportation, finance and real estate.
BRP was co-founded by Chairman of the Board Lowry Baldwin in 2011. Lowry Baldwin got his start in the insurance business in 1981. In 2000, he sold his firm, DavisBaldwin, which was then one of the 40 largest privately held brokerage firms in the country, to Wachovia Bank. He subsequently co-founded Baldwin Krystyn Sherman Partners, or BKS, BRP’s predecessor in 2006, along with Elizabeth Krystyn and Laura Sherman, both of whom remain actively engaged in the firm. The executive management team is now led by Trevor Baldwin, CEO, who joined the firm in 2009.
J.P. Morgan and B of A Securities, along with Jefferies and Wells Fargo Securities, are acting as joint-book running managers, and Raymond James and Keefe, Bruyette & Woods are acting as co-managers for the offering.
The past year or so has seen at least two other insurance agency IPOs. In April, Texas-based insurance agency franchise model Goosehead Insurance raised $85 million with its IPO, selling 8.5 million shares at $10. It trades on the Nasdaq exchange under the symbol GSHD. Cambridge, Mass.-based online auto, home and life insurance marketplace EverQuote raised $84 million in July, 2018. The shares are trading on Nasdaq under the symbol EVER.
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