IPO Report: Conifer Holdings (CNFR)

Francis Gaskins |

Conifer Holdings (CNFR) is a Michigan-based insurance holding company formed in 2009. Through its insurance subsidiaries, CNFR offers insurance coverage in both specialty commercial and specialty personal product lines. The company is based in Birmingham, MI.

Three other companies are scheduled for the week of Aug. 9. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: BMO Capital Markets, Raymond James
Co-managers: Sandler O'Neill+Partners, William Blair

End of lockup (180 days): Monday, February 8, 2016
End of 25-day quiet period: Monday, September 7, 2015

CNFR scheduled a $55 million IPO with a market capitalization of $107 million at a price range midpoint of $12 for Wednesday, Aug. 12, 2015 on Nasdaq.

CNFR Summary

CNFR is a Michigan-based insurance holding company formed in 2009. Through its insurance subsidiaries, CNFR offers insurance coverage in both specialty commercial and specialty personal product lines.

CNFR Valuation


Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Conifer Holdings (CNFR)








CNFR Conclusion


Q1 rev +14%; non-proforma '14 rev+106% vs '13

Proforma P/E 30

Price to book 1.1

Selling 51% on the IPO

CNFR Business

CNFR is a Michigan-based insurance holding company formed in 2009. Through its insurance subsidiaries, CNFR offers insurance coverage in both specialty commercial and specialty personal product lines.

Many of CNFR’s products are targeted to profitable classes of policyholders that are underserved by other insurers.

CNFR markets and sells these insurance products through a growing network of over 4,500 independent agents that distribute its policies through their approximately 2,200 sales offices writing business in 44 states.

CNFR is focused on growing its business in non-commoditized property and casualty insurance markets, while maintaining underwriting discipline and a conservative investment strategy.

CNFR’s commercial lines and personal lines business accounted for 65% and 35% respectively, of its net earned premiums for the three months ended March 31, 2015 and 62% and 38%, respectively, of its net earned premiums for the year ended December 31, 2014.

CNFR has substantial expertise in serving the unique commercial insurance needs of owner-operated businesses in the following markets:

Hospitality, such as restaurants, bars, taverns, and bowling centers (that require, among other lines, liquor liability insurance), as well as small grocery and convenience stores; Artisan contractors, such as plumbers, painters, carpenters, electricians and other independent contractors;

Security service providers, such as companies that provide security guard services, security alarm products and services, and private investigative services; and Automobile repair and used car facilities.

In its commercial lines business, CNFR seeks to differentiate itself and provide value to small business owner-operators by bundling different insurance products that meet a significant portion of their insurance needs.

For example, in the hospitality market CNFR offers property, casualty, and liquor liability, as well as, in some jurisdictions, workers' compensation coverage.

The breadth of CNFR’s specialty commercial insurance products enables its small business customers, many of whom do not have dedicated risk management personnel, and their agents, to save the administrative costs and time required to seek coverage for these items from separate insurers.

As such, CNFR competes for commercial lines business based on its flexible product offerings and customer service, rather than on pricing alone. CNFR’s target commercial lines has an average account size of $5,000 in premium.

Intellectual property

CNFR claims service mark rights to its trade names and corporate logos and have either a U.S. registration or U.S. applications for registration with the U.S. Patent and Trademark Office for such trade names and corporate logos. Such registrations and applications protect CNFR’s intellectual property from confusingly similar use. CNFR monitors its trademarks and service marks and protect them from unauthorized use as necessary.

CNFR uses a licensed system for policy administration in its underwriting, claims management and financial statement generation. The license has a term that expires in July 2018. CNFR believes that it can utilize other available systems and technologies in the event that the license is not renewed upon expiration.


In this fragmented market, CNFR competes with both large national insurance providers and smaller regional specialty insurance companies on the basis of customer service, coverages offered, claims handling, price, agent commission and financial strength ratings.

Many of CNFR’s competitors have higher ratings, more capital, greater resources and additional access to capital than CNFR does. They may offer a wider range of products and services than CNFR does and may cover larger geographic markets.

5% shareholders pre-IPO

Strength Capital Partners           20.6%

James G. Petcoff          44.3%

Mark McCammon          20.8%  


No dividends are planned.

Use of proceeds

CNFR expects to receive $50 million from its IPO and use it for the following:

to use $17.1 million (the estimated balance on its Revolver plus accrued interest upon completion of this offering) of the net proceeds from this offering to pay down its senior debt, $6.3 million (or $3.2 million after netting out the proceeds from preferred shareholders who have agreed to use such proceeds to purchase common stock) to repurchase outstanding preferred stock and pay accrued preferred stock dividends and the balance of the proceeds to fund the growth of its operating subsidiaries and for general corporate purposes. CNFR’s preferred stock is perpetual, bears interest at 10% per year on the original issue price, and accrues paid-in-kind ("PIK") interest at 4% per year, compounded quarterly. The PIK interest is payable upon redemption.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
CNFR Conifer Holdings Inc. 8.25 0.01 0.12 315


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