Jacksonville-based specialty insurer Fortegra Group has withdrawn its plans for an initial public offering in the United States, just hours before the IPO and nearly three years after the company scrapped its earlier listing plans.
The move by Fortegra, a unit of investment manager Tiptree Inc, underscores a pessimism in capital markets due to poor performance of newly minted public companies.
The Warburg Pincus-backed company aimed for a valuation of up to $1.52 billion last month.
Shares of Connecticut-based Tiptree slipped 3% before the bell on Wednesday after Fortegra cited “prevailing market conditions” and the high value that Tiptree and Warburg Pincus place on Fortegra and its growth prospects for the withdrawal. Fortegra had filed with the U.S. Securities and Exchange Commission to sell 18 million shares, priced between $15 and $18 apiece, and raise about $324 million at the top end. It was to have been managed by Goldman Sachs/JP Morgan.
Fortegra Specialty Insurance Co. was authorized in Florida in 2020, according to the Florida Office of Insurance Regulation, but the company said on its website that it has underwritten risk through subsidiaries for 45 years. It offers surplus lines products in Florida and other jurisdictions.
Financial documents filed by the company show that Fortegra Group had generated about $2.6 billion in gross written premium and had $115 million in adjusted net income in 2023, with a healthy combined ratio. The company has cited a strong annual growth and tailwinds in the property/casualty market, including demand for managing general agency expertise and growth in the E&S market.
A slate of companies including BirkenstockBIRK.N, Amer SportsAS.N, Morgan Stanley Direct Lending FundMSDL.N and Kazakhstan-based banking and fintech giant Kaspi.kzKSPI.O are trading below their IPO prices, Reuters news reported. Still, some investors expect the U.S. IPO market to stage a rebound as bets of a soft landing firm up. Social media firm Reddit, cloud security company Rubrik and software startup ServiceTitan are all expected to go public in 2024.
Reuters news service and the Associated Press contributed to this report.
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