The IPO Buzz: Hamilton Insurance Group (HG) Prices IPO at $15.00 – Below Range

Hamilton Insurance Group (HG) priced its IPO at $15.00 – $1.00 below the low end of its $16.00-to-$18.00 price range – on Thursday night (Nov. 9, 2023). The profitable Bermuda specialty insurance and reinsurance company priced 15.0 million shares – the number of shares in the prospectus – at $15.00 to raise $225.0 million. The IPO raised $30 million less than the estimated IPO proceeds of $255.0 million, which assumed pricing at $17.00, the mid-point of the range. Hamilton’s stock is expected to start trading Friday, Nov. 10, 2023, on the New York Stock Exchange. Barclays, Morgan Stanley, Citigroup and Wells Fargo Securities were the joint book-runners. Pricing the IPO at $15.00 gave Hamilton Insurance Group a valuation (market cap) of $1.65 billion. That’s in contrast to the projected valuation of $1.87 billion, based on an IPO price of $17.00, the mid-point of the range. The interest in Hamilton Insurance Group’s IPO came mostly from “long only funds,”  the IPO pros say. Of the 15.0 million shares in the IPO, the Bermuda specialty insurance and reinsurance company offered 6.25 million shares and selling shareholders offered 8.75 million shares. Hopkins Holdings, a shareholder, and certain directors had given non-binding indications of interest to buy 260,000 shares – about 1.7 percent of the IPO. Private equity firms Blackstone, Hamilton Lane, Hopkins Holdings and Magnitude Partners are among the principal shareholders, the prospectus says. Hamilton Insurance Group is a global specialty insurance and reinsurance company founded in Bermuda in 2013. “Our diversified underwriting model is complemented by a unique and long-term investment management relationship with Two Sigma,” Hamilton Insurance says in the prospectus. “Founded in 2001, Two Sigma is a premier investment manager with a strong track record and approximately $60 billion of assets under management across affiliates as of April 1, 2023.” Two Sigma managed $1.6 billion of Hamilton Insurance Group’s assets as of Dec. 31, 2022, via the company’s investment in the Two Sigma Hamilton Fund, according to the prospectus. Hamilton Insurance Group says its business is 57 percent international and 43 percent Bermuda, based on gross premiums written for the year ended Dec. 31, 2022, according to the prospectus. The company’s international business consists of business written out of its Lloyd’s syndicate in London and its subsidiaries in the United Kingdom, Ireland and the United States, including its Hamilton Global Specialty and Hamilton Select platforms. The international business includes commercial specialty and casualty insurance and specialty reinsurance products. The U.S. Excess & Surplus (“E&S”) market is part of Hamilton’s international business. The company’s Bermuda business consists of Hamilton Re, Ltd. and Hamilton Re US. The insurance product lines include property, casualty and specialty reinsurance business and high excess Bermuda market specialty insurance products, predominantly for large U.S. commercial risks, according to the prospectus. Hamilton Insurance Group is a money machine. For the 12 months that ended on June 30, 2023, Hamilton Insurance Group reported net income of $87.42 million on revenue of $1.2 billion. (For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.) Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board. To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message. Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions. Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.