Verisk IPO Raises $1.88 Billion, More Than Planned

By Jamie McGee
Bloomberg

Oct. 7 (Bloomberg) -- Verisk Analytics Inc., the supplier of actuarial data co-owned by insurers including Travelers Cos., sold $1.88 billion of stock in an initial public offering, more than planned, in the biggest U.S. IPO since Visa Inc. in 2008.

Verisk sold about 85.3 million shares for $22 a share yesterday, according to data compiled by Bloomberg. The Jersey City, New Jersey-based company had said it would sell shares for $19 to $21 each.

The 56 percent rise in U.S. stock prices since March is prompting company executives to hold IPOs. Investors are betting that an economic recovery will boost earnings, luring buyers to IPOs after a two-year drought. Eleven companies sold shares in September, the most since January 2008, according to Bloomberg data. Verisk Chief Executive Officer Frank Coyne is seeking to capitalize on demand for data that insurance companies use to price coverage and detect policyholder fraud.

?There is going to be investor interest for this,? said David Menlow, president of IPOfinancial.com in Milburn, New Jersey. Verisk seems ?to be carrying their proprietary analytics package to some of the largest property and casualty companies,? he said.

Insurers, reinsurers and brokers analyze records on everything from weather to driving behavior to select customers and set rates. The IPO values Verisk at about $2.5 billion, about 30 times its net income of $80.9 million in 2008. The company had net income of $90.9 million in the first half of 2009 on revenue of $503.7 million, last week?s filing shows.

?Positive Indicator?

The offering is a ?very positive indicator? for the IPO market, Menlow said. ?Now it appears as though the market is ready to start taking some of the deals, but not at a rapid pace.?

In Brazil, Banco Santander (Brasil) SA raised about 14.1 billion reais ($8 billion) in the largest IPO the country has ever seen. The shares are due to begin trading today.

Verisk will trade on the Nasdaq Stock Market under the ticker VRSK. The company won?t receive any money from the sale. American International Group Inc., Hartford Financial Services Group Inc. and Travelers are among insurers selling stakes in the company. Warren Buffett?s Berkshire Hathaway Inc. is part owner and isn?t selling shares in the offering, the filing shows.

Bank of America Corp., Morgan Stanley, JPMorgan Chase & Co., Wells Fargo & Co., William Blair & Co., Fox-Pitt Kelton Cochran Caronia Waller LLC, and KBW Inc. are underwriting the offering, Verisk said.

Visa, the world?s largest electronic-payments network, raised more than $19 billion in a March 2008 IPO. It was the world?s second-largest public offering after the Industrial & Commercial Bank of China Ltd.?s $22 billion debut in 2006.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net
Last Updated: October 7, 2009 04:13 EDT