Fidelis eyes $88m take on pending IPO; existing shareholders may hit $200m

Fidelis Insurance Holdings may raise $88 million in fresh capital in an upcoming IPO while helping existing shareholders rake in well over twice that amount, the company said in an update to its IPO documentation.

The group anticipates offering just over 5.71 million new shares in the deal, nearly 5.2% of current equity, while existing shareholders unload some 11.29 million shares, a 10.2% stake.

Fidelis will cap its own take and trim supply if the market offers more than the $17.50 per share mid-point of the $16 to $19 initial pricing target range. Fidelis will cut the new equity tranche proportionally to keep gross proceeds from crossing the $100 million mark. Fidelis is prepared to live with any shortfall from a downside pricing surprise.

Existing shareholders may take a gross total of $197.5 million at the $17.50 mid-point price or $214 million at the upper end.

Fidelis intends to use proceeds to bulk up key units and jump on the enduring hard market, the group said.

Fresh capital flow to at key subsidiaries, plus existing liquidity "should enable us to take advantage of the ongoing rate hardening in the key markets in which we participate by writing more business under our planned strategy," management said.

Fidelis last clocked in as a $3 billion insurer by gross written premium after 7.6% annual growth from 2021. Q1 2023's $1.25 billion tally was up a heady 28.3% year on year.

The IPO follows a rather complex split of the business between its risk-bearing side and the MGU underwriting business being taken separately by Fidelis founder Richard Brindle.

The Fidelis headed for the NYSE is positioned as a global, specialty insurance provider still holding exclusive right of first access to the MGU’s under a ten-year framework deal between sides.

J.P. Morgan, Barclays and Jefferies are acting as joint lead bookrunning managers with Keefe, Bruyette & Woods, BMO Capital Markets, Citigroup, UBS, JMP Securities and Dowling in on the deal.

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