Bamboo Insurance Aims for $3.13 Billion Valuation in US Public Offering

Bamboo Insurance Services, a residential property insurer backed by private equity firm CVC, is targeting a valuation of up to $3.13 billion in its U.S. initial public offering, according to a regulatory filing on Monday. The company's selling shareholders aim to raise as much as $700 million in the listing.

Offering Details

The Midvale, Utah-based company plans to offer 35 million shares at a price range of $18 to $20 per share. The firm intends to list on the New York Stock Exchange under the ticker symbol "BMB".

Key figures from the filing include:

• Target Valuation: Up to $3.13 billion
• Capital to be Raised: Up to $700 million
• Exchange: New York Stock Exchange
• Ticker Symbol: BMB

A consortium of banks, including J.P. Morgan, Morgan Stanley, Deutsche Bank Securities, Evercore ISI, and Wells Fargo Securities, are serving as underwriters for the offering, according to the filing.

Business Model and Growth

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Founded in 2018, Bamboo operates as a managing general underwriter (MGU), a specialized model where it underwrites and distributes insurance policies on behalf of other carriers that ultimately bear the claims risk. The company focuses on the residential property market, providing homeowners' insurance and related products.

Bamboo's growth has been significantly bolstered by dislocations in California's insurance market. As several major insurers have scaled back operations in the state due to recurring wildfire risks, Bamboo has capitalized on the opportunity, capturing approximately 4% of California's homeowners insurance market as of last year.

Valuation and Market Context

The IPO valuation target represents a substantial step-up from last year, when European private equity firm CVC acquired a majority stake from White Mountains Insurance in a transaction that valued Bamboo at $1.75 billion.

Bamboo's public debut comes amid a challenging environment for new listings, as market volatility driven by inflation and rising oil prices has resulted in a slower IPO season compared to a year ago. Despite this, the insurance sector pipeline remains active, with Florida-based Orion180 Insurance also launching its IPO roadshow last week.