Third re/insurance SPAC vehicle from Cohen & Co. raises $250m IPO

The third insurance, reinsurance and insurtech focused Special Purpose Acquisition Company, or SPAC, from fixed income financial services focused investment firm Cohen & Company, LLC has now successfully completed an upsized $250 million initial public offering (IPO).

The SPAC, named INSU Acquisition Corp. III, launched its IPO process targeting a $200 million public offering of shares, which with over-allotments could have reached as much as $230 million based on the initial S1 terms.

But demand helped the asset manager raise its third SPAC vehicle with $250 million of capital, including over-allotments, as it completed an initial public offering of 25,000,000 units at a price of $10.00 per unit.

Cohen & Co has been active in the Special Purpose Acquisition Company (SPAC) space for some years and launched its first SPAC with a specific insurance, reinsurance and insurtech remit in early 2019.

Insurance Acquisition Corp. (IAC), as the first SPAC was called, eventually raised almost $151 million and then entered into a combination transaction with automotive e-commerce firm, Shift Technologies Inc.

This was followed up quickly with INSU Acquisition Corp. II around the middle of 2020, with that second insurance and reinsurance focused SPAC vehicle eventually raising $230 million including exercised over-allotment options.

The second re/insurance SPAC from Cohen & Co. entered into a high-profile combination with insurtech Metromile, taking the company public in the process in a deal that gave Metromile a pro forma enterprise value at closing of $956 million and a pro-forma market cap of $1.3 billion.

As with the previous SPAC vehicles, INSU Acquisition Corp. III has John Butler, formerly a Managing Partner at insurance-linked securities (ILS) investment specialist Twelve Capital and who joined Cohen & Co. in 2017, as its President and CEO.

Now that this third insurance, reinsurance and insurtech SPAC IPO has been completed, the so-called blank check company will look to identify and enter into an acquisition, merger or other deal, taking that company public in the process.

The target is again insurance and reinsurance related service companies, including re/insurance carriers, as well as insurance technology start-ups (insurtech’s).

Cohen & Co’s SPAC’s are no longer the only ones targeting opportunities in the re/insurance sector, as a number of others have since launched, including one named Delwinds which raised around $201m and most recently a SPAC named Kairos launched with the backing of ILS fund manager Hudson Structured Capital Management.

As we’ve said before, these special purpose acquisition companies, or blank check investment vehicles, provide an attractive proposition for investors right now, giving them a way to back investors with specific insurance and reinsurance sector expertise on unknown acquisitions and combinations, but that can return significant multiples.

The listing makes the investment opportunity even more compelling for some, given the potential liquidity options it provides as well.

Now, for Cohen & Co. the next step with its latest SPAC will be to identify an opportunity worth investing in and taking public, as it aims to continue building this innovative pipeline of returns for its investors.