Shares in CBL Corporation debuted at a solid premium after the company went public yesterday in New Zealand's second public share offer of the year.
The financial risk insurer's stock, which was priced in the initial public offering at $1.55 a piece, traded as high as $1.78 before closing up 14.2 per cent at $1.77.
The company also listed on Australia's ASX, where its shares closed at A$1.615 last night.
Auckland-based CBL raised $125 million through the offer, $90 million of which is new capital earmarked for growth, including funding the firm's $46 million acquisition of Australian specialty insurer Assetinsure Holdings.
The offer price valued the company at $340.5 million. CBL managing director Peter Harris said the premium to the offer price achieved by CBL shares yesterday sent a good signal to investors.
The final pricing of the offer was set through a bookbuild from an indicative range of $1.45 to $1.85.
"We were never looking for the last dollar - we weren't exiting," he said of the offer price. "It's always good to leave a little bit on the table."
Existing shareholders, including Harris, were expected to retain a 60 to 63 per cent stake in CBL after the offer. Harris said the Assetinsure acquisition will occur today and it would take at least a year to fully integrate that business into CBL.
The two businesses were well-aligned, he said, although some of Assetinsure's product lines - such as property loans and property and casualty insurance - were not "core business" to CBL.
"We'll be looking closely at those [non-core] lines," Harris said, adding that divestments were a possibility.
Chairman Sir John Wells said the listing was a big step in CBL's evolution. "CBL has successfully pursued an international strategy of strong growth by focusing on profitable, non-traditional insurance lines in specific markets," he said. "Our new capital structure will allow us to do that even more effectively."
Harris said Mexico, where CBL recently acquired a 35 per cent stake in Fiducia, a Mexican insurer, was a big focus for the company.
"We've been doing very successful business in Mexico for 12 years," he said. "Through our investment in Fiducia we want to expand our footprint throughout Mexico."
CBL, whose products include residential builder warranties and construction bonds, derives almost 98 per cent of its gross revenue outside New Zealand.
It was founded more than 40 years ago, began its international expansion in 2000 and today employs more than 100 staff across eight international offices.
It has forecast net profit to rise from $19.4 million in the 2014 calendar year to $26.1 million in 2015 (excluding the contribution of the Assetinsure acquisition) and $40.4 million in 2016. CBL's IPO is the second in New Zealand this year after Fliway Group, which raised $35 million in April. There were 12 NZX main board IPOs last year.