A fund affiliated with Centerbridge Partners has invested $100m in TypTap Insurance Group, a subsidiary corporation of HCI Group.
This investment marks around 11.75% of TypTap.
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It indicates a post-money valuation for TypTap of around $850m.
TypTap is an insurance tech firm. It offers homeowners and flood insurance in Florida.
The firm intends to widen its operations across the country.
It has received regulatory approval in 10 additional states with approvals pending in an additional nine states in the US.
In return for its investment, Centerbridge secured from TypTap preferred shares with liquidation, dividend, redemption, and other rights.
Centerbridge also secured from HCI a four-year warrant to acquire 750,000 HCI common shares at $54.40 per share.
Following completion of an initial public offering meeting some parameters, the preferred shares gets automatically converted to common shares.
Under the terms of the investment, Centerbridge is entitled to appoint one director to both the HCI and TypTap boards of directors.
HCI and TypTap CEO Paresh Patel said: “We are excited about our partnership with Centerbridge. This capital infusion will enable TypTap to pursue its national expansion plans rapidly and to continue developing innovative insurance-related technologies.
“We will immediately begin preparing TypTap for future growth. Centerbridge will be a valuable partner in all our efforts and we look forward to working with them.”
Centerbridge managing director Eric Hoffman said: “We have been enthusiastically observing TypTap’s growth trajectory and progress over the last couple of years and are particularly impressed by what the leadership team has been able to accomplish with respect to profitably scaling its InsurTech platform.”
J.P. Morgan Chase & Co. served as sole placement agent on the deal. Foley & Lardner acted as legal advisor for HCI Group. Kirkland & Ellis was the legal advisor for Centerbridge.
