CVC-backed Bamboo Insurance targets $3.24 billion valuation in US IPO

By Pragyan Kalita and Pritam ‌Biswas

Sept 14 (Reuters) - CVC-backed ​Bamboo ​Insurance Services is targeting a valuation of up to $3.24 billion on a fully diluted basis in its U.S. initial public offering, ‌the company revealed in a filing on Monday.

The Midvale, Utah-based ⁠company's selling shareholders are seeking up to $700 million by offering 35 million shares priced between $18 ‌and $20 apiece.

Despite a strong backlog ‌of companies preparing to go public, the fall IPO season has started more slowly than a year ago as volatility due to rising oil ​prices and inflation weighs on deal activity.

Within the insurance sector, however, the pipeline remains strong with many of the recent insurance IPOs having ⁠performed relatively well in the aftermarket.

"I think part of that reflects the operating environment for the insurance ​industry. Recurring revenue and relatively resilient demand are attractive characteristics in the current volatile market," said IPOX Vice President Kat ​Liu.

Melbourne, Florida-based Orion180 Insurance launched its roadshow ‌last week seeking to raise up to $340 million.

Founded in 2018 and led by industry veteran John Chu, Bamboo focuses ⁠on the residential property market, providing homeowners' insurance and related products.

The company operates as a managing general underwriter (MGU), meaning it underwrites and distributes policies on behalf of ⁠insurance carriers that ultimately bear the claims risk.

"The trade-off is that this creates a different ​type of risk. The business becomes more dependent on its relationships with insurance carriers and other capacity providers," Liu said.

White Mountains Insurance, which was a major shareholder in ‌the firm, sold a majority stake to European private equity firm CVC last year, valuing the company at $1.75 billion.

It ‌intends to list on the New York Stock Exchange under the symbol "BMB".

J.P. Morgan, ⁠Morgan Stanley, Deutsche Bank Securities, Evercore ‌ISI and Wells Fargo ​Securities, among others, are serving as underwriters for the offering.

(Reporting by Pragyan Kalita and Pritam Biswas in Bengaluru; Editing by ‌Vijay Kishore)

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