Investors double-down on Verisk IPO

Posted Oct 7th 2009 1:40PM by Tom Taulli
Filed under: Bank of America (BAC), Morgan Stanley (MS), Initial Public Offerings

Verisk Analytics isn't a catchy name but it has caught the interest of investors. The data analytics company was able to issue 85.25 million shares at $22 each for its IPO, raising a cool $1.9 billion. So far in today's trading, the shares of the company are up 30% to $28.59.

Basically, Verisk helps businesses deal with risk, with the main focus on property & casualty exposures. For example, the company's models can help predict the loss of a building due to a fire.

Besides having sophisticated algorithms, Verisk has a massive database of 14 billion records. What's more, the company added two billion records over the past three years.

All in all, the models work quite well. Verisk counts all the top 100 P&C insurance companies as customers.

And, the financial results have been particularly strong. Last year, Verisk posted $894 million in revenues, with $158 million in net income. For the first half of this year, revenues were $504 million.

Going forward, Verisk will build out new products as well as expand into new categories, such as mortgage and healthcare. There will also likely be more acquisitions.

The underwriters on the IPO include BofA Merrill Lynch (NYSE: BAC) and Morgan Stanley (NYSE: MS).

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: IPO, Verisk Analytics, VeriskAnalytics