Tiptree: Monetizing A Piece Of The Biggest Asset And Demonstrating Enormous Sum Of The Parts

Summary

  • 10,666,667 shares @ $11.25/Fortegra share represents $120 million equity investment for 17.5% of Fortegra at $691 million valuation.
  • Warrants for another 3.52 million shares struck at $15, or $912 million valuation.
  • $80 million of 8% preferred shares with small additional warrants.
  • Equity investment alone values Tiptree's stake in Fortegra @ $16.20/Tiptree share.
  • Rest of the business brings TIPT book value to $23.55/share.
Whole is greater than the sum of its parts

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The Transaction:

Warburg Pincus, one of the world's largest private equity firms, invested $200 million in Tiptree's (NASDAQ:TIPT) specialty insurance Fortegra for a 24% stake on a fully converted/diluted basis. The company hosted a brief conference call this morning (October 12th) along

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of TIPT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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