Investors around the market were enraptured by AXA’s recent announcement that the insurer’s forthcoming IPO for its U.S. division would be pricing shares at $24 to $27 per share, which could value the company at well more than $3.5 billion. Market watchers have been keeping a close eye on AXA ever since it became clear that the insurer’s U.S. arm would be going public, but few expected such a mammoth valuation that could help propel the company to the forefront of American markets.
These are the details behind AXA’s forthcoming IPO, and what investors will want to know about the European insurance behemoth before throwing their financial heft behind it.
A European Insurance Empire
American investors may be largely unfamiliar with AXA, (PA:AXAF) given that it’s a French-based insurance company, but they’ll be impressed the minute they start doing their homework; the insurer could have the biggest IPO in the U.S. this year, if it hits the top of its expected range, and could bring home a market valuation of $3.5 to $4 billion if investors are pleased with their initial purchases. AXA Equitable Holdings, Inc. will be going public on the American market for the first time, but its broader parent company, AXA S.A., has a well-established foothold on the European market that’s made it quite the investment target for many years.
While AXA’s parent company is based in France, the company’s American division has been scooping up North American customers for some time; the company has been helping clients deal with futures and insurances since 1859, according to Business Wire, as has more than $670 billion in assets under its management. Such colossal sums will draw the eyes of investors from all across the market, and for good reasons; there’s virtually no reason to believe that AXA will be strapped for cash anytime soon. The nearly $4 billion the company generates from a successful IPO could nonetheless prove instrumental towards expanding its presence in North American markets, which its market debut appears to be setting it up for.
Filings made by the company with the SEC show that the serious risk it will be confronting in the marketplace remain few and far between, too; outside of the traditional insurance hazards AXA will need to keep an eye out for, like watching its credit valuation, AXA doesn’t have many things on its radar that could prove fatal to the company in the near future. While American insurance giants aren’t likely to take the intrusion into their market likely, AXA has plenty of capital to back up its expansion into a foreign market, even without using CoinMetro tokens that allow it to trade foreign currency. As such, it could stand to give many established North American behemoths a run for their money by expanding its footprint in the U.S.
The company will be selling nearly 157 million shares, which would generate a bare minimum of some $3.5 billion if it hits near the midpoint of its expected pricing range. Investors can expect their money to be put to good use if they back AXA, too; the company will be using the profits from its IPO to help fund the impressive acquisition of XL Group, which could prove crucial towards its future, according to the Financial Times.
An Upped Target Has investor’s Hopes High
AXA was initially trying to gleam some $2.5 billion from the IPO of its U.S. division, so the upped target the company is now shooting for with its market debut should remind investors that its executives see plenty of reasons to be optimistic about the future. The extra cash it generates from a thriving debut will be needed for its acquisition of the XL Group (NYSE:XL), which AXA is paying significantly more for than many originally suspected. The company faced some tough bids in the acquisition process, so being forced to shell out more than $15 billion in a takeover has doubtlessly impacted its IPO plans.
AXA’s forthcoming IPO isn’t the only news emanating from the company, either; AXA also intends to launch some $750 million in bonds soon, too, meaning investors who are ready to back the company should be preparing for a veritable spending spree. The market may have suffered earlier this year from fears of a looming trade war, but the booming IPO scene is clearly undeterred by earlier fears. Europe’s second-biggest insurer by market capitalization, AXA will doubtlessly soon be scooping up more North American fans in heaps and spades. While insurers across the globe are dealing with a harsher regulatory environment than they used to, AXA is showing that these companies still have a few tricks up their sleeves. Expect big things from AXA’s forthcoming market debut; it could very well be the biggest IPO of the year, and from what we know right now, it’s almost certain to steal the oxygen from many of its competitors that are gasping for air.