The deal is being made at a price of $26.40 per common share. This represents gross proceeds of about $40,022,400.
Trisura also revealed that concurrently with the closing of the offering, it will offer up to 455,000 common shares in a private placement at the offering price. This could result in additional gross proceeds of up to $12,012,000 with Partners Value Investments LP, Trisura’s principal shareholder. Partners Value Investments will also subscribe for not less than its pro rata ownership position – about $10,000,000 of the gross proceeds of the private placement.
Closing of the offering and the private placement will be conditional on each other, a release said.
In addition to the offering, Trisura has granted the underwriters an option to purchase an additional 15% of the common shares at the offering price at any time – in whole or in part – up to 30 days following closure of the offering.
Trisura has stated that it intends to use the net proceeds of the offering and the private placement for “general corporate purposes.” These purposes include (but are not limited to) supporting the growth of Trisura’s US fronting platform and improving the asset liability matching of its reinsurance business.
“This financing will support enhanced growth in the U.S. to complement strong results in Canada,” said Trisura president and CEO David Clare.
The CEO noted that Trisura experienced continued momentum in its growing US business since the end of the second quarter – the US team achieved its highest monthly premiums written for the period, and continued to generate new business.
Clare also mentioned that the company is expecting a negative non-cash impact from Trisura International Insurance in Q3, resulting in a non-cash net loss for Trisura Group for the quarter. This is driven by the increasingly “challenging” environment for European interest rates.
“A portion of the proceeds of this transaction will be used to materially augment our existing asset liability matching to achieve our risk management goals in this business segment,” the chief executive explained.
