IPO Filing: Penn Millers Holding Corporation (PMIC)

We have a new IPO filing from Penn Millers Holding Corporation.  This is far from a traditional IPO, and it looks as though it is destined to be in the micro-cap stock offerings.  What is interesting is that this looks like a demutualization of the company.  There is no public market for the common stock and it has applied for the stock ticker of "PMIC" on NASDAQ.

The company has filed to sell 2,932,500 shares at $10.00 per share fortotal proceeds of $29,325,000.00.  A minimum of 1,950,750 shares ofcommon stock must be sold to complete the offering, and the company maysell between 1,950,750 and 2,639,250 shares without resolicitingpurchasers. The company’s ESOP has the right to purchase that number ofshares equal to 10% of the total number of shares sold in the offering.

Griffin Financial Group, LLC will use its best efforts to assist PennMillers in selling common stock in the offering, but is not obligatedto purchase any shares of common stock that are being offered forsale.  The company also said in the filing said that buyers of itsstock will not pay any commission to purchase shares in the offering.

The shares of the company’s common stock in the offering will representbetween 45% and 49.5% of the outstanding shares. Upon completion of theoffering, its parent mutual holding company, Penn Millers MutualHolding Company, will continue to hold a majority of the outstandingshares of its common stock.

There are also some minimum and maximum limits on shares which can bepurchased.  The minimum number of shares that a person may subscribe topurchase is 25 shares. Except for the company’s ESOP, the maximumnumber of shares that a person may purchase is 100,000 shares.

Penn Millers use of proceeds will initially be used to make a loan toits ESOP in an amount sufficient to permit the ESOP to buy 10% of theshares sold in the offering.  After the loan to its ESOP, the companyexpects to contribute most of the net proceeds to Penn MillersInsurance Company to supply additional capital to support future growthin its net premiums written.

Again, far from a typical IPO.

Jon C. Ogg
January 26, 2009