Heritage Announces Closing of Primary Public Offering of Shares of Common Stock and Concurrent Private Placement
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Insights
The recent completion of a primary offering and subsequent private placements by Heritage Insurance Holdings represents a strategic move to bolster the company's capital. The offering of over 3.7 million shares at a public price of $6.75, coupled with the option for underwriters to purchase additional shares, indicates a proactive approach to fundraising. The gross proceeds of approximately $26.5 million before expenses suggest a significant infusion of cash that the company plans to allocate for general corporate purposes and to support growth and expansion efforts.
Investors and market observers should note the participation of significant stakeholders, such as Raymond T. Hyer and company executives, in the private placements at varying prices. This could be interpreted as a vote of confidence in the company's future prospects. However, it is essential to scrutinize the terms of such insider transactions for fairness and market conformity.
From a financial perspective, the immediate effect of this capital raise may dilute existing shareholders but could potentially strengthen the company's financial position. Long-term, the success of the deployment of these funds will be a critical factor in evaluating the impact of this transaction on shareholder value.
Heritage Insurance Holdings' recent capital raise through a public offering and private placements is indicative of broader trends in the insurance industry, where companies often need substantial capital reserves to underwrite new policies and expand operations. The involvement of JonesTrading as the sole book-running manager and Stonybrook Capital as the financial advisor underscores the importance of expert financial guidance in executing such transactions.
The use of a shelf registration statement for the public offering reflects a strategic approach to capital raising, allowing the company to act quickly when market conditions are favorable. The reliance on an exemption from registration for the private placements suggests a targeted approach to involve specific investors, which is common in the industry to minimize regulatory burdens and expedite transactions.
The legal framework of Heritage Insurance Holdings' capital raise, involving both a public offering and private placements, highlights the company's compliance with SEC regulations. The use of Form S-3 for the public offering and the exemption under Section 4(a)(2) of the Securities Act for the private placements are standard mechanisms for such transactions. However, it is important for legal professionals and investors to ensure that all disclosures and filings are accurate and that the transactions are executed in accordance with SEC rules to protect investor interests.
Furthermore, the participation of company insiders in the private placements warrants careful legal scrutiny to ensure adherence to insider trading laws and regulations. The pricing of shares, especially in private transactions involving executives, must be transparent and justifiable to prevent any potential conflicts of interest or unfair advantages.
Concurrently, Heritage announced the completion of the purchase by Raymond T. Hyer, a current holder of approximately
The gross proceeds to Heritage from the Public Offering and Private Placement, before deducting underwriting discounts, commissions and other offering expenses, are approximately
As previously disclosed, Heritage intends to use the net proceeds from the Public Offering and the Private Placement for general corporate and operations purposes and to provide capital for anticipated growth and expansion efforts.
JonesTrading Institutional Services LLC ("JonesTrading") acted as the sole book-running manager for the Public Offering. Stonybrook Capital, LLC and its affiliates (registered representatives of Weild & Co, member FINRA and SIPC) acted as Financial Advisor.
The Public Offering was made pursuant to a shelf registration statement on Form S-3 filed with the Securities Exchange Commission (the "SEC"), and declared effective by the SEC on April 22, 2021, and only by means of a prospectus and prospectus supplement. The final terms of the Public Offering were disclosed in a final prospectus supplement filed with the SEC and is available on the SEC's website at www.sec.gov. Alternatively, copies of the prospectus supplement and accompanying prospectus relating to the Public Offering may be obtained by sending a request to: JonesTrading, Attention: Equity Capital Markets, 325 Hudson Street, 6th Floor,
The sale of shares of common stock in the Private Placement was made in reliance on an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended.
About Heritage Insurance Holdings, Inc.
Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately
Forward-Looking and Cautionary Statements:
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. This press release contains forward-looking statements regarding the use of proceeds from the Public Offering and Private Placement. These forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Heritage's control, including, without limitation, market conditions, the trading price and volatility of our common stock, and the satisfaction of customary closing conditions related to the Public Offering. Actual results could differ materially from those stated or implied in these forward-looking statements due to a number of factors, including but not limited to, risks detailed in the sections entitled "Risk Factors" and elsewhere in Heritage's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as in the Registration Statement on Form S-3 related to the shares filed with the SEC. The forward-looking statements included in this press release should not be unduly relied upon, represent Heritage's views only as of the date of this press release and do not represent Heritage's views as of any subsequent date. Heritage undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in Heritage's expectations or otherwise, except as required by law.
Contact:
Kirk Lusk
Chief Financial Officer
klusk@heritagepci.com
investors@heritagepci.com
Zack Mukewa and Mike Houston
Investor Relations
Lambert
HRTG@lambert.com
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SOURCE Heritage Insurance Holdings, Inc.
FAQ
What is the recent announcement from Heritage Insurance Holdings, Inc. (NYSE: HRTG)?
How will the proceeds from the offering and private placement be utilized by Heritage Insurance Holdings, Inc. (NYSE: HRTG)?
Who acted as the sole book-running manager for the Public Offering of Heritage Insurance Holdings, Inc. (NYSE: HRTG)?
What is the registration status of the Public Offering by Heritage Insurance Holdings, Inc. (NYSE: HRTG)?
How can copies of the prospectus supplement and accompanying prospectus relating to the Public Offering be obtained from Heritage Insurance Holdings, Inc. (NYSE: HRTG)?
