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Hudson Structured backed SPAC Kairos prices 20% upsized IPO


Kairos Acquisition Corp., the new insurance, reinsurance and insurtech focused Special Purpose Acquisition Company (SPAC), or blank check company, that Hudson Structured Capital Management Ltd. is behind, has increased the size of its initial public offering by 20% to raise $240 million.

hudson-structured-capital-management-logoWe covered the news in December, that Hudson Structured Capital Management, the Michael Millette founded transportation, reinsurance and insurance-linked securities (ILS) focused investment manager that undertakes its reinsurance work as HSCM Bermuda, had entered the Special Purpose Acquisition Company (SPAC) market.

Kairos Acquisition Corp., a so-called blank check company incorporated in the Cayman Islands, was aiming to raise up to $200 million through an initial public offering of its shares, plus up to another $30 million if over-allotment options were exercised in full.

Now, Kairos has priced the raise for $240 million of initial units that will be listed on the NASDAQ Capital Market as of later today, with still an over-allotment option offering that could see another up to $36 million raised if the underwriters of the deal elect to take it within 45 days.

Which suggests a possible initial capitalisation of as much as $276 million for Kairos (if the over-allotment options are taken in full), representing a very successful first foray into the Special Purpose Acquisition Company (SPAC) market for Hudson Structured.

As with all SPAC company launches, the capital raised will now be put to work in finding an acquisition or combination transaction, putting the capital raised to work and bringing an established entity to listing through Kairos’ NASDAQ IPO’d structure.

The target sectors for Kairos are the insurance, reinsurance and insurtech sectors, with a broad remit to enter into acquisition or combination transactions with carriers, MGA’s, run-off managers, fronting companies, brokers, other service providers and insurance technology start-ups all potential target entities.

The thesis behind Kairos is similar to other re/insurance focused SPAC’s, that there is significant value locked up in the insurance and reinsurance sector currently and that Kairos, with the support of Hudson Structured and an impressive board, can unlock this value, providing a platform that can take an existing entity, propel it to listing given its IPO and then build out the company, or sell it to make a profit.

Kairos “intends to focus on regulated insurance or reinsurance companies, distributors or technology and insurance service providers that focus on specialty lines of business or that target product or customer niches,” the IPO pricing announcement explained.

Hudson Structured will take a slice of Kairos, allocating investor capital to it presumably and bringing both an alignment with it and securing a share of any profitable returns for the ILS and reinsurance focused investment funds it manages.

Kairos Acquisition Corp. is sponsored by Kairos Alpha Acquisition LLC and HS Chronos LLC, both Delaware limited liability companies.

HS Chronos LLC is a Hudson Structured (HSCM) related entity, owned by the HSCM Bermuda Fund Ltd. and HS Santanoni LP fund.

HS Chronos LLC will take a significant ownership in the listed SPAC, having purchased founder shares in the structure as well as being lined up to potentially purchase up to $19.8m of the IPO offering for Kairos.

Michael Millette, Hudson Structured founder, will be a board observer for Kairos, while Hudson Structured Partner and Chief Investment Officer for the HSCM Insurtech Strategy Vikas Singhal will be a board director.

Peter Bang will be Kairos’ CEO, an executive with years of investment banking and insurance sector focus who was most recently MD of ERG Capital Partners, and Jerry Michael de St. Paer will be its CFO, an executive with a long history in reinsurance having served on the board of SCOR Re US, as CFO of XL Capital, and numerous other senior roles.

Chairman of the Kairos Board will be Robert Glanville, founding partner of Pine Brook and someone who worked at re/insurer Arch in the early to mid 2000’s, structuring collateralised reinsurance sidecars and other entities for the firm.

Other directors include Garrett Koehn of CRC fame, John Lummis of AQR Re and RenRe fame, Thomas Motamed of AIG and previously CNA, Michael J. Stone of RLI Corp., and Susan Sutherland of Ascot, Montpelier Re and who was previously a Partner at law firm Skadden, Arps.

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