ING U.S., soon to be known as Voya Financial, has named a 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 last week to offer about 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 interest 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 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 last year, 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.
NO EASY COMPARISON
Finding comparable IPOs is no easy task because though other insurers have gone public in recent years, those offerings were significantly smaller than Voya's.
Symetra Financial Corp., for instance, hit the market in January 2010 with a share price of $12. The company sold 30.4 million shares and raised $364.8 million.
In April that year, Primerica Inc. raised $320 million in gross proceeds with an offering initially priced at $15 a share.
The circumstances surrounding Voya's debut are different, as the company will have some baggage, said Andrew Edelsberg, a vice president at A.M. Best Co. Inc.
“They're a different profile from Symetra,” he said.
“Symetra started with a clean slate. ING is trying to re-brand, but they have a legacy block of variable annuities that has some issues,” Mr. Edelsberg said.
“They're also going up against companies with significant brands, such as Prudential [Financial Inc.] and MetLife [Inc],” he said. “It's going to take some time to re-establish that brand.”
Still, Ken Johnson, a managing senior financial analyst at AM Best, said that Voya's IPO is well-timed.
“They've done a lot to get the U.S. company ready for this, and the timing is good,” he said.
“They have an accepting market. There's strength in retirement, individual life and employee benefits,” Mr. Johnson said.
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