Demutualization IPO Filing: Employers Holdings

Employers Holdings, Inc. has filed to come public in an IPO, but this is not a run of the mill IPO.  The company has filed to sell up to $287,960,000 in an IPO, but this is actually a demutualization of one of the remaining mutual insurance companies out there.

Employers Holdings, Inc. is the name that EIG Mutual Holding Company, a Nevada mutual insurance holding company, will adopt upon consummation of its conversion to a stock corporation. This conversion and name change will occur immediately prior to the closing of the offering of common stock described in this registration statement. 

Investors love demutualizing IPO’s.  Recent "partnerships to public entities" such as MasterCard (MA) and KBW (KBW), plus the impending Visa IPO, will probably give an easy floor for this deal whener terms come out.  There is no share count estimated and there is no price range, so obviously you have to see valuations when that occurs.  They have proposed to get a stock ticker of "EIG" on the NYSE, and so far Morgan Stanley is the only listed underwriting firm on the filing.

"Employers" is a specialty provider of workers’ compensation insurance focused on select small businesses engaged in low to medium hazard industries mostly located in several western states, primarily California and Nevada.  "Employers"distributes almost exclusively through independent agents and brokers and our strategic distribution relationships.  For the year ended December 31, 2005 and the nine months ended September 30, 2006: net premiums written were $439.7 million and $299.5 million, total revenues of $496.5 million and $359.2 million, and net income of $137.6 million and $116.5 million.  "Employers" had total assets of $3.2 billion at September 30, 2006.

This almost certainly won’t hit the IPO show until early in 2007, but this may be one to watch since it has done so well and in such a limited geographic area.  This has the earmarks and buzzwords that IPO investors love to see: demutualization, regional-to-national, solid income, predictable cash flows……..

Jon C. Ogg
December 4, 2006