Property and casualty insurer TWFG Inc. (TWFG Proposed) unveiled the terms for its $165 million IPO – expected to price next week – in an SEC filing early today (Tuesday, July 9, 2024). TWFG, which caters to individual and small business clients, is offering 11.0 million Class A shares at a price range of $14.00 to $16.00 to raise $165.0 million, if priced at the $15.00 mid-point of that range, according to its S-1/A filing dated July 9, 2024. TWFG would have a market cap – or a valuation – of about $815 million, assuming mid-point pricing at $15.00, according to the prospectus. This is a NASDAQ listing. (Please see the IPO Calendar for the pricing date.)
“We are the seventh-largest personal lines agency in the U.S., based on revenue; we are the 26th largest agency across all lines of business,” TWFG says in the prospectus.
J.P. Morgan, Morgan Stanley, BMO Capital Markets and Piper Sandler are the joint lead book-runners. RBC Capital Markets, UBS Investment Bank, Keefe Bruyette & Woods (a Stifel company) and William Blair make up the rest of the joint book-running team.
TWFG stands for The Woodlands Financial Group, the prospectus says. The company is based in The Woodlands, a Houston suburb.
Of the $154.3 million in the IPO’s estimated net proceeds, a total of $41.0 million – or about 26.6 percent – will be used to repay debt under TWFG’s revolving credit agreement, the prospectus says.
“Built by Agents, for Agents”
TWFG will be controlled after the IPO by founder and CEO Richard F. “Gordy” Bunch III, who will hold 94.4 percent of the combined voting power of the outstanding stock, the prospectus says.
Bunch founded TWFG in 2001. He “created TWFG with a mantra of ‘Built by Agents, for Agents,’” the prospectus says.
“He identified the frictions inherent to captive distribution and set out to build a platform with tools and support functions that could better serve independent agents looking to run their own businesses. This foresight has positioned TWFG to benefit from a decades-long structural shift to independent agents that continues to gain momentum today,” the prospectus says.
The company says that its distribution platform “consists of more than 400 branches in 17 states and the District of Columbia as well as more than 2,000 MGA agencies in 41 states,” according to the prospectus. (MGA stands for Managing General Agent.)
TWFG is profitable. For the 12 months that ended March 31, 2024, TWFG reported net income of $26.52 million on revenue of $179.39 million.
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