D.E. Shaw, Goldman Sachs to Sell James River Stock in IPO

D.E. Shaw & Co. and Goldman Sachs Group Inc. will raise as much as $288 million through an initial public offering of Bermuda-based insurance company James River Group Holdings Ltd., according to a filing today.

“We now seek to replace some of the capital provided by the D. E. Shaw affiliates and Goldman Sachs with investments by public equity investors and certain members of our senior management team,” according to the filing, which added that Chairman J. Adam Abram, President Robert Myron and Chief Financial Officer Gregg Davis have indicated they will invest.

D.E. Shaw, a hedge fund company founded by billionaire David Shaw, bought James River for about $575 million in 2007 and now owns 72.6 percent, with New York-based Goldman Sachs holding 26.3 percent. James River had $386.3 million in revenue last year, up from $237.2 million in 2006. The company had $731.9 million in total stockholders’ equity at the end of June.

The company, founded in 2002, underwrites excess and surplus insurance nationwide and workers’ compensation, including for homebuilders and health-care workers in North Carolina, South Carolina, Virginia and Tennessee. James River said in the filing that it’s seeking to increase its so-called fronting business, where it writes policies and then sells the risk.

James River issued Uber Technologies Inc.’s insurance policy, according to a post on the ridesharing platform’s website. The policy covers as much as $1 million per incident, San Francisco-based Uber said.

Abram, who is also chief executive officer, previously founded Front Royal Group, which was sold in 2001 to Argo Group International Holdings Ltd.

The sale amount of $288 million listed in the document is a placeholder used to calculate registration fees and may change. Stifel Financial Corp.’s Keefe, Bruyette & Woods Inc., UBS AG, FBR Inc. and Bank of Montreal’s BMO Capital Markets unit will manage the share offering, according to the filing.

The insurer plans to apply to list its shares on Nasdaq OMX Group Inc.’s Nasdaq Stock Market, under the symbol JRVR.

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