Specialty property and casualty (P&C) insurer, Hallmark Financial Services, has announced plans to pursue an initial public offering (IPO) of a non-controlling ownership stake within its specialty commercial business segment, under the name Hallmark Specialty Group, Inc.
The number of shares of Hallmark Specialty Group to be offered and the price range for the offering have not yet been determined, but are expected to represent an economic ownership stake of approximately 50%.
Hallmark Financial intends to retain at least a majority of the combined voting power of Hallmark Specialty Group’s shares through its ownership of high-vote common shares.
The insurer expects to complete the IPO process during the third quarter of 2021. However, the execution of the IPO is dependent upon, and subject to, a number of factors and uncertainties, including business and market conditions.
Mark Schwarz, Executive Chairman, President and Chief Executive Officer (CEO), commented: “Our Specialty Commercial business has grown significantly over the past 15 years.
“We have concluded that this transaction will allow Hallmark Financial and Hallmark Specialty Group to focus on their respective businesses and unique opportunities for long-term growth and profitability and to allocate capital and corporate resources in a manner that focuses on achieving each company’s own strategic priorities.”
The company notes that following the completion of the IPO, it currently has no plans to divest its ownership interest in Hallmark Specialty Group.
Furthermore, Hallmark Specialty Group will not include business produced by the Aerospace & Programs business unit, the exited Binding Primary Auto business, or any business produced by third-party program managers (which includes a senior care and a commercial auto program), each of which will be retained by Hallmark Financial.
