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IPO Season Kicks Off
The much delayed initial public offering (IPO) of Symetra Financial Corp (NYSE:SYA) will finally come to fruition early in 2010, nearly two years after the offering was shelved due to turmoil in the stock market. A successful performance for this IPO will help confirm a further comeback for the financials market.
IN PICTURES: Digging Out Of Debt In 8 Steps
History
Symetra Financial Corporation has an interesting history. The company was originally called Safeco Life and Investments, and was purchased from Safeco Insurance in 2004 by an investment group of public and private companies including White Mountains Insurance (NYSE:WTM) and Berkshire Hathaway (NYSE:BRK.A, BRK.B).
Safeco Insurance had decided to get out of the life insurance business and concentrate on property and casualty insurance instead. Safeco Insurance has since been purchased by Liberty Mutual Group.
The investment group got Safeco Life and Investments at a low price, paying $1.35 billion for a company with a GAAP book value of $2.57 billion. Symetra Financial Corporation was set to offer shares in an IPO in late 2007, but was forced to postpone the offering due to market conditions.
IPO Details
Symetra Financial Corporation is offering 27 million shares to the public at between $12 and $14 per share, with 17.3 million shares being offered by the company, and the balance sold to the public by the investment group.
Symetra Financial Corporation has four business segments that offer a range of life insurance products, including term and universal life insurance, fixed and variable deferred annuities, and medical stop-loss insurance. (Learn more about annuities in Annuities: How To Find The Right One For You.)
One interesting part of the IPO is that neither White Mountains Insurance (NYSE:WTM) or Berkshire Hathaway are part of the selling group of shareholders, and both companies are holding on to their shares of Symetra Financial Corporation.
One selling shareholder is Ochs Ziff Master Fund, Ltd., which is selling 609,000 shares. It's not clear how this fund is connected to Och-Ziff Capital Management Group LLC (NYSE:OZM), the publicly traded asset management company.
Symetra Financial Corporation has done well the last three years, navigating the recession and financial crisis in good shape. The company earned only 20 cents per share in 2008, after reporting $1.50 in 2007. However, through the first nine months of 2009, Symetra Financial Corporation earned 86 cents per share.
Symetra Financial Corporation has a GAAP book value of $13.25 per share so if the deal prices where it is expected, investors are buying in close to book value. The company does not have a lot of fluff on its balance sheet and tangible book value per share pro forma for the IPO is $12.42 per share.
Investors should keep an eye on the progress of the upcoming IPO of Symetra Financial Corp., since the company operates in the much feared financial sector. This one may be a true test of the recovery of the market.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: Digging Out Of Debt In 8 Steps
History
Symetra Financial Corporation has an interesting history. The company was originally called Safeco Life and Investments, and was purchased from Safeco Insurance in 2004 by an investment group of public and private companies including White Mountains Insurance (NYSE:WTM) and Berkshire Hathaway (NYSE:BRK.A, BRK.B).
Safeco Insurance had decided to get out of the life insurance business and concentrate on property and casualty insurance instead. Safeco Insurance has since been purchased by Liberty Mutual Group.
The investment group got Safeco Life and Investments at a low price, paying $1.35 billion for a company with a GAAP book value of $2.57 billion. Symetra Financial Corporation was set to offer shares in an IPO in late 2007, but was forced to postpone the offering due to market conditions.
IPO Details
Symetra Financial Corporation is offering 27 million shares to the public at between $12 and $14 per share, with 17.3 million shares being offered by the company, and the balance sold to the public by the investment group.
Symetra Financial Corporation has four business segments that offer a range of life insurance products, including term and universal life insurance, fixed and variable deferred annuities, and medical stop-loss insurance. (Learn more about annuities in Annuities: How To Find The Right One For You.)
One selling shareholder is Ochs Ziff Master Fund, Ltd., which is selling 609,000 shares. It's not clear how this fund is connected to Och-Ziff Capital Management Group LLC (NYSE:OZM), the publicly traded asset management company.
Symetra Financial Corporation has done well the last three years, navigating the recession and financial crisis in good shape. The company earned only 20 cents per share in 2008, after reporting $1.50 in 2007. However, through the first nine months of 2009, Symetra Financial Corporation earned 86 cents per share.
Symetra Financial Corporation has a GAAP book value of $13.25 per share so if the deal prices where it is expected, investors are buying in close to book value. The company does not have a lot of fluff on its balance sheet and tangible book value per share pro forma for the IPO is $12.42 per share.
Investors should keep an eye on the progress of the upcoming IPO of Symetra Financial Corp., since the company operates in the much feared financial sector. This one may be a true test of the recovery of the market.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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