Local insurer files for $100M IPO

Kinsale

Kinsale moved in 2014 to 2221 Edward Holland Drive. File photo – December 2013 – by Michael Schwartz.

A fast-growing local insurance company is looking to go public with an initial public offering that could reach $100 million.

Henrico-based Kinsale Insurance filed its preliminary IPO registration documents on Friday with the U.S. Securities and Exchange Commission. The July 1 filing, made on the first day of the fiscal year, was made by Kinsale Capital Group, of which Kinsale Insurance is a subsidiary.

The company, which specializes in property, casualty and specialty insurance policies for a variety of businesses, seeks to list common stock on the NASDAQ exchange under the symbol “KNSL.”

The initial registration document does not include an expected per-share offering price or a date for the IPO. The $100 million is a placeholder maximum offering amount that could change as the IPO process progresses.

Mike Kehoe

Mike Kehoe

On Tuesday, Kinsale founder and CEO Mike Kehoe said the company is in an SEC-required “quiet period” due to the filing and declined to comment beyond its contents.

The offering follows significant growth for the 7-year-old company, which reported revenues from gross written premiums grew from $125 million in 2013 to $177 million by the end of last year. Net profit grew from $12.2 million in 2013 to $29.2 million in 2015.

Kinsale has been among Richmond’s fastest growing companies in each of the last three years, according to BizSense’s RVA 25 rankings.

The company’s controlling stockholder is private equity firm Moelis Capital Partners, which the filing identifies as the primary selling stockholder in the offering. Kinsale’s principal investors are private equity firm NexPhase Capital, which is an offshoot of Moelis, and Richmond-based Virginia Capital Partners, along with the Kinsale management team, according to its website.

Founded in 2009, Kinsale began writing business policies in March 2010 and is eligible to do so in all 50 states and Washington, D.C. As of July 1 this year, the company had 144 employees and occupied 34,000 square feet of offices in the Anthem building at 2221 Edward Holland Drive, where it pays an annual rent of about $600,000.

Kinsale moved to the building in 2013, and its lease there will expire in 2020. The company does not own any real estate.

The filing also shows that Kinsale Insurance has a rating of A-, or excellent, from rating agency A.M Best – the fourth-highest rating offered by the agency.

Kinsale is identified as an “emerging growth company,” meaning it generated less than $1 billion in revenue during the most recent fiscal year. As such, Kinsale can take advantage of reduced SEC reporting requirements that otherwise apply to public companies, such as presenting only two years of audited financial statements, and reduced disclosure obligations regarding executive compensation in public filings.

The filing indicates that Kinsale plans to avail itself of those reduced disclosure requirements, and it acknowledges that doing so could make its common stock less attractive to investors.

Underwriters of the offering include J.P. Morgan Securities, William Blair & Company, RBC Capital Markets and Moelis & Company, an affiliate of Moelis Capital Partners.

Because Moelis Capital Partners is Kinsale’s controlling stockholder, there is a conflict of interest with Moelis & Company, according to rules under the Financial Industry Regulation Authority. According to the filing, those rules allow Moelis & Company to participate because the other underwriters satisfy certain criteria and do not have a similar conflict of interest with Kinsale.

The process for the SEC to review and complete an IPO can take several months.

Kinsale is the latest Richmond-based company to pursue a public offering. Performance Food Group sought a $400 million raise in its return to the New York Stock Exchange last year. Apple Hospitality REIT joined the Big Board last year. And Allegiancy, a 3-year-old real estate firm, recently took its $30 million IPO back to the drawing board.

Kinsale

Kinsale moved in 2014 to 2221 Edward Holland Drive. File photo – December 2013 – by Michael Schwartz.

A fast-growing local insurance company is looking to go public with an initial public offering that could reach $100 million.

Henrico-based Kinsale Insurance filed its preliminary IPO registration documents on Friday with the U.S. Securities and Exchange Commission. The July 1 filing, made on the first day of the fiscal year, was made by Kinsale Capital Group, of which Kinsale Insurance is a subsidiary.

The company, which specializes in property, casualty and specialty insurance policies for a variety of businesses, seeks to list common stock on the NASDAQ exchange under the symbol “KNSL.”

The initial registration document does not include an expected per-share offering price or a date for the IPO. The $100 million is a placeholder maximum offering amount that could change as the IPO process progresses.

Mike Kehoe

Mike Kehoe

On Tuesday, Kinsale founder and CEO Mike Kehoe said the company is in an SEC-required “quiet period” due to the filing and declined to comment beyond its contents.

The offering follows significant growth for the 7-year-old company, which reported revenues from gross written premiums grew from $125 million in 2013 to $177 million by the end of last year. Net profit grew from $12.2 million in 2013 to $29.2 million in 2015.

Kinsale has been among Richmond’s fastest growing companies in each of the last three years, according to BizSense’s RVA 25 rankings.

The company’s controlling stockholder is private equity firm Moelis Capital Partners, which the filing identifies as the primary selling stockholder in the offering. Kinsale’s principal investors are private equity firm NexPhase Capital, which is an offshoot of Moelis, and Richmond-based Virginia Capital Partners, along with the Kinsale management team, according to its website.

Founded in 2009, Kinsale began writing business policies in March 2010 and is eligible to do so in all 50 states and Washington, D.C. As of July 1 this year, the company had 144 employees and occupied 34,000 square feet of offices in the Anthem building at 2221 Edward Holland Drive, where it pays an annual rent of about $600,000.

Kinsale moved to the building in 2013, and its lease there will expire in 2020. The company does not own any real estate.

The filing also shows that Kinsale Insurance has a rating of A-, or excellent, from rating agency A.M Best – the fourth-highest rating offered by the agency.

Kinsale is identified as an “emerging growth company,” meaning it generated less than $1 billion in revenue during the most recent fiscal year. As such, Kinsale can take advantage of reduced SEC reporting requirements that otherwise apply to public companies, such as presenting only two years of audited financial statements, and reduced disclosure obligations regarding executive compensation in public filings.

The filing indicates that Kinsale plans to avail itself of those reduced disclosure requirements, and it acknowledges that doing so could make its common stock less attractive to investors.

Underwriters of the offering include J.P. Morgan Securities, William Blair & Company, RBC Capital Markets and Moelis & Company, an affiliate of Moelis Capital Partners.

Because Moelis Capital Partners is Kinsale’s controlling stockholder, there is a conflict of interest with Moelis & Company, according to rules under the Financial Industry Regulation Authority. According to the filing, those rules allow Moelis & Company to participate because the other underwriters satisfy certain criteria and do not have a similar conflict of interest with Kinsale.

The process for the SEC to review and complete an IPO can take several months.

Kinsale is the latest Richmond-based company to pursue a public offering. Performance Food Group sought a $400 million raise in its return to the New York Stock Exchange last year. Apple Hospitality REIT joined the Big Board last year. And Allegiancy, a 3-year-old real estate firm, recently took its $30 million IPO back to the drawing board.

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