ING U.S., soon to be known as Voya Financial, has named its price for its upcoming initial public offering: $21 to $24 a share.
The insurer filed an updated S-1 form with the Securities and Exchange Commission yesterday to offer roughly 64 million shares of common stock. The firm will be listed on the New York Stock Exchange using its new moniker as a symbol: VOYA.
The offering will consist of two parts: offering of shares from ING U.S. followed by an offering from ING Insurance International BV. The total offering will add up to about $1.4 billion to $1.5 billion in size, including $600 million in primary proceeds. The IPO will reduce the ownership of ING's Dutch parent to 75%.
A trio of ING U.S.' businesses will make up Voya's operations: retirement solutions, investment management and insurance. Closed-block variable annuities and institutional spread products will be two segments run separately from the rest of the businesses.
Full-year operating results seem to paint an improving picture of ING's U.S. business. Net income climbed to $611.2 million in 2012, from $102.8 million in 2011. Net income per common share was $2.06 last year, compared with a loss of 38 cents in 2011.
Finding comparable IPO is no easy task because while other insurers have gone public in recent years, those offerings were significantly smaller compared to Voya’s. Symetra Financial Corp., for instance, hit the market in January 2010 with a share pricing of $12. The company sold 30.4 million shares and raised $364.8 million. In April of that year, Primerica raised $320 million in gross proceeds with an offering initially priced at $15 per share.
Indeed, the circumstances surrounding Voya’s debut are different as the company will have some baggage from its past, noted Andrew Edelsberg, a vice president at AM Best Co. Inc.
“They’re a different profile from Symetra,” he said. “Symetra started with a clean slate. ING is trying to rebrand, but they have a legacy block of variable annuities that has some issues.”
“They’re also going up against companies with significant brands, such as Prudential [Financial Inc.] and MetLife,” Mr. Edelsberg said. “It’s going to take some time to reestablish that brand.”
Still, Ken Johnson, a managing senior financial analyst at AM Best, noted that Voya’s IPO had fortuitous timing.
“They've done a lot to get the U.S. company ready for this, and the timing is good,” he added. “They have an accepting market. There’s strength in retirement, individual life and employee benefits.”