TIPTREE INC TIPT
October 12, 2021 - 7:43am EST by
goob392
2021 2022
Price: 10.75 EPS 0 0
Shares Out. (in M): 34 P/E 0 0
Market Cap (in $M): 365 P/FCF 0 0
Net Debt (in $M): 0 EBIT 0 0
TEV (in $M): 0 TEV/EBIT 0 0

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Description

 

Specialty Insurance Sub Fortegra valued at less than BV with stock at $10.75.  Deal announced this morning with Warburg Pincus values Fortegra at about 2X BV for 20-25% of the business and recasts the corporate balnce sheet by paying off intercompany debt.

Fortegra: nice specialty insurence business they bought in 2014 and have grown and improved since.  low 90s CR, mid/high teens ROE. BV (pre-deal) $8.50.

Tip Tree Capital: the investment piece (outside of Fortegra). own fiancials (mortgage) and real assets (shipping and senior care). BV $5.50. let's say it's worth BV to be conservative.

Corporate: was negative $2.60 due to intercompany debt, now positive $1.83 post deal).

Total: impled value of Fortegra $16.20 , TC $5.52 and corp (cash):$1.83  =   $23.55.

Yes, i know it will not trade at $23.55 but it will not stay at $10.75 either

 

 

 

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.

Catalyst

Warburg transaction highlights value of Fortegra specialty insurance and likely results in faster growth and highe rprofile going forward.

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