Bowhead Specialty Holdings Inc. Announces Pricing of Secondary Offering of Common Stock

Rhea-AI Summary

Bowhead Specialty Holdings (NYSE: BOW) has announced the pricing of a secondary public offering of 4,000,000 shares of common stock by existing stockholders at $29.00 per share. The Selling Stockholders have granted underwriters a 30-day option to purchase up to 600,000 additional shares. The company will not receive any proceeds from the sale as it's not selling any shares. The offering is expected to close on October 25, 2024. J.P. Morgan, Morgan Stanley, and Keefe, Bruyette & Woods are acting as joint lead bookrunning managers.

Positive

• None.

Negative

• Significant shareholder selling pressure with 4 million shares being sold
• Potential additional dilution of 600,000 shares through underwriters' option
• No proceeds benefiting the company from this transaction

Insights

Financial Analyst

This secondary offering of 4 million shares priced at $29.00 per share indicates significant insider selling, potentially raising concerns about valuation and insider sentiment. The total offering size of $116 million (excluding overallotment) represents approximately 12% of Bowhead's market cap, which is a substantial portion.

The involvement of major underwriters like J.P. Morgan and Morgan Stanley adds credibility to the offering, but the fact that existing shareholders are cashing out rather than the company raising new capital could signal that insiders believe the stock is fully valued. The additional 600,000 share overallotment option could put further pressure on the stock price if exercised.

While secondary offerings are normal for public companies, the timing and size warrant attention from investors. The stock may face near-term selling pressure as the market absorbs this additional supply of shares.

NEW YORK--(BUSINESS WIRE)-- Bowhead Specialty Holdings Inc. (NYSE: BOW) (the “Company”, “Bowhead Specialty”, “we” or “our”) today announced the pricing of an underwritten secondary public offering of 4,000,000 shares of its common stock by certain of its stockholders (the “Selling Stockholders”) at a price to the public of $29.00 per common share. In connection with the offering, certain of the Selling Stockholders have granted the underwriters a 30-day option to purchase up to an additional 600,000 shares of the Company’s common stock.

The Company is not selling any shares of its common stock in the offering and will not receive any of the proceeds from the sale. The offering is expected to close on October 25, 2024, subject to customary closing conditions.

J.P. Morgan, Morgan Stanley and Keefe, Bruyette & Woods, A Stifel Company are acting as joint lead bookrunning managers for the offering and as representatives of the underwriters. Citizens JMP, RBC Capital Markets and Dowling & Partners Securities, LLC are acting as joint bookrunning managers and Siebert Williams Shank is acting as co-manager for the offering.

A registration statement on Form S-1, including a preliminary prospectus, relating to these securities was filed with the U.S. Securities and Exchange Commission (the “SEC”), and declared effective on October 23, 2024 and is available on the SEC’s website at www.sec.gov. The offering is being made only by means of a prospectus. Copies of the final prospectus relating to the offering may be obtained from: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; or Keefe, Bruyette & Woods, Inc., Attention: Capital Markets, 787 Seventh Avenue, 4th Floor, New York, NY 10019, or by email at uscapitalmarkets@kbw.com, or by telephone at (800) 966 1559.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Bowhead Specialty Holdings Inc.

Bowhead Specialty is a growing specialty insurance business providing casualty, professional liability and healthcare liability insurance products. We were founded and are led by industry veteran Stephen Sills. The team is composed of highly experienced and respected industry veterans with decades of individual, successful underwriting and management experience. We focus on providing “craft” solutions in our specialty lines and classes of business that we believe require deep underwriting and claims expertise in order to produce attractive financial results.

We pride ourselves on the quality and experience of our people, who are committed to exceeding our partners’ expectations through excellent service and expertise. Our collaborative culture spans all functions of our business and allows us to provide a consistent, positive experience for all of our partners.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in press release are forward-looking statements. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “seeks,” “future,” “outlook,” “prospects” “will,” “would,” “should,” “could,” “may,” “can have” or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with the consummation of the offering and other risks described in the Company’s registration statement on Form S-1 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 and any subsequent filings with the SEC. Forward-looking statements speak only as of the date of this press release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241023954037/en/

Investor Relations

Shirley Yap, Head of Investor Relations

investorrelations@bowheadspecialty.com

Source: Bowhead Specialty Holdings Inc.

FAQ

What is the price per share for Bowhead Specialty Holdings (BOW) secondary offering?

The secondary offering is priced at $29.00 per share.

How many shares are being offered in BOW's secondary offering?

4,000,000 shares are being offered, with an additional option for underwriters to purchase up to 600,000 shares.

When will BOW's secondary offering close?

The offering is expected to close on October 25, 2024, subject to customary closing conditions.

Will Bowhead Specialty Holdings (BOW) receive proceeds from this offering?

No, Bowhead Specialty Holdings will not receive any proceeds as this is a secondary offering by existing stockholders.