- Genworth Mortgage Holdings (ACT) released details Tuesday for its upcoming IPO, which will partly spin out the firm from parent company Genworth Financial (NYSE:GNW).
- Genworth Mortgage also announced that the company is changing its name to Enact Holdings Inc. in connection with the initial public offering. Plans call for Enact to list on the Nasdaq under the ticker symbol “ACT.”
- The company wrote in a press statement and a revised S-1 filing that parent Genworth Financial will offer the public some 22.6M shares of the renamed company at an expected price range of $20 to $24 a share.
- Genworth Financial is also granting underwriters the option to buy an extra roughly 3.4M shares to cover overallotments.
- ACT added that Genworth Financial and Enact have also agreed to a private placement that will sell an extra 4M shares at the IPO price to certain investment vehicles managed by Bayview Asset Management. Depending on the IPO’s ultimate pricing, that should raise another $80M to $96M.
- All told, Enact expects to have some 162.8M shares outstanding after the IPO, as per the company’s S-1. At that level, ACT will have about a $3.3B to $3.9B non-diluted market capitalization, depending on where the IPO prices at in its expected $20-$24 range.
- Parent Genworth Financial will continue to own about 83.7% of Enact following the IPO, or some 81.6% of the firm if underwriters exercise all overallotment options.
- Enact operates Genworth Mortgage Insurance Co., which sells the private mortgage insurance that consumers typically must get if they purchase homes with less than 20% down payments.
- ACT wrote in its S-1 that proceeds from the offering will go to parent company Genworth Financial. Depending on how many shares the IPO sells and at what price, the offering should gross between $531.5M and $719.1M.
- Seeking Alpha contributor Anthony Steinmetz recently analyzed the IPO and concluded that it "alleviates liquidity concerns at the company's holding company and will unlock value for [Genworth] shareholders."