(Image source TypTap homepage.)
TypTap Insurance Group, Inc. (Ocala, Fla.), a provider of flood and homeowners’ insurance founded in 2016 with the mission of utilizing technology, data, and data analytics to simplify the insurance experience, has announced that a fund affiliated with Centerbridge Partners, L.P. (New York) has invested $100 million in the company. The investment, representing about 11.75 percent of TypTap, implies a post-money valuation for TypTap of approximately $850 million. TypTap plans to expand its operations nationwide, having received regulatory approval in 10 additional states with approvals pending in an additional nine states. TypTap is a subsidiary of HCI Group (Tampa, Fla.).
Paresh Patel, CEO, TypTap Insurance.
In exchange for its investment, Centerbridge received from TypTap preferred shares with liquidation, dividend, redemption, and other rights and received from HCI a four-year warrant to purchase 750,000 HCI common shares at $54.40 per share, a TypTap statement says. The preferred shares automatically convert to common shares upon completion of an initial public offering meeting certain parameters. Terms of the investment also entitle Centerbridge to appoint one director to both the HCI and TypTap boards of directors.
“We are excited about our partnership with Centerbridge,” comments Paresh Patel, CEO of HCI and TypTap. “This capital infusion will enable TypTap to pursue its national expansion plans rapidly and to continue developing innovative insurance-related technologies. We will immediately begin preparing TypTap for future growth. Centerbridge will be a valuable partner in all our efforts and we look forward to working with them.”
Profitably Scaling InsurTech Platform
“We have been enthusiastically observing TypTap’s growth trajectory and progress over the last couple of years and are particularly impressed by what the leadership team has been able to accomplish with respect to profitably scaling its InsurTech platform,” comments Eric Hoffman, Managing Director, Centerbridge.
Eric Hoffman, Managing Director, Centerbridge.
HCI will file one or more Forms 8-K with the Securities and Exchange Commission containing additional information regarding this transaction. The company has also made available a supplemental presentation that can be found in the Investor Information section of HCI Group’s website.
J.P. Morgan Chase & Co. acted as sole placement agent on the transaction. Foley & Lardner LLP acted as legal advisor for HCI Group. Kirkland & Ellis LLP acted as legal advisor for Centerbridge.
HCI Group, Inc. is a holding company that owns subsidiaries engaged in what it calls diverse, yet complementary business activities, including homeowners insurance, reinsurance, real estate and information technology. The company’s largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., is a provider of property and casualty insurance in the state of Florida.