NEW YORK: United States insurance policy comparison website SelectQuote Inc raised US$360mil after selling shares in its initial public offering (IPO) above its target range on Wednesday.
SelectQuote’s offering is the latest sign of thawing in the IPO market.
The market was shut to most companies when the coronavirus outbreak fueled weeks of stock market volatility in March and April.
Only a handful of biotechnology and blank-check companies went ahead with IPOs during this period.
Since late February, the Cboe Volatility Index, known as Wall Street’s fear gauge, has been above the 20-point threshold that most IPO hopefuls monitor to gauge investor jitters.
But it has trended downwards in recent weeks.
This is giving some companies confidence to test the market.
SelectQuote allows consumers to compare insurance policies for life, auto and home insurance from providers including American International Group, Prudential Financial Inc and Liberty Mutual.
The biggest IPO by a company that is neither a biotechnology firm nor special purpose acquisition company since the onset of the pandemic was by Chinese cloud computing company Kingsoft Cloud Holdings Ltd.
The company raised US$510mil in its US stock market debut earlier this month.
Overland Park, Kansas-based SelectQuote said it sold 18 million shares as planned, and existing shareholders sold 10.5 million shares, up from seven million, at US$20 each as part of the IPO.
The company had set a target range of between US$17 and US$19 per share.
The IPO valued SelectQuote at US$3.25bil.
The pricing of the IPO was brought forward by a day on the back of strong investor demand.
Shares of SelectQuote peer EverQuote Inc hit a record high earlier this month, after the company increased its full-year revenue and adjusted earnings before interest, taxes, depreciation and amortisation or Ebitda forecast.
EverQuote also said it expects the virus outbreak to accelerate the digitisation of the insurance industry.
While using websites to compare and buy insurance products is commonplace around the world, the US insurance industry has been slower to embrace technology as means of bypassing traditional insurance brokers.
For the nine months to the end of March, SelectQuote posted US$390.1mil in revenue. This was up almost 50% year on year while net income edged up 2.4% to US$61.1mil.
The company’s stock is set to start trading on the New York Stock Exchange soon under the symbol “SLQT”.
Credit Suisse and Morgan Stanley are the lead underwriters for the IPO. — Reuters
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