CVC-backed Bamboo Insurance targets $3.13 billion valuation in US IPO

CVC-backed Bamboo Insurance Services aims to raise up to $700 million through its U.S. IPO, seeking a valuation of $3.13 billion, as per a filing made on Monday. The Midvale, Utah-based firm is offering 35 million shares priced between $18 and $20 each.

Although the initial public offering season has been slower this year due to volatility from rising oil prices and inflation, the insurance sector pipeline remains robust. Despite softening industry pricing and a more selective investor environment, the firm is making strides in the residential property market.

Founded in 2018 by industry veteran John Chu, Bamboo focuses on homeowners' insurance and related products, operating as a managing general underwriter (MGU). This means the company underwrites and distributes policies on behalf of insurance carriers, bearing the claims risk. Growth has been driven by dislocations in California's insurance market, where recurring wildfires led to several insurers reducing operations, allowing Bamboo to secure approximately 4% of the state's homeowners insurance market as of last year.

White Mountains Insurance, which held a majority stake in the firm, recently sold it to European private equity firm CVC for $1.75 billion in 2021. Bamboo plans to list on the New York Stock Exchange under the symbol BMB. Major underwriters for the offering include J.P. Morgan, Morgan Stanley, Deutsche Bank Securities, Evercore ISI, and Wells Fargo Securities.