Blank check company upsizes raise to $218 million ahead of insurance M&A

INSU Acquisition III, a blank check company set up to acquire or merge with one or more businesses in the insurance industry, has raised $218 million by offering 21.8 million units at $10.

The company, which is the third blank check firm set up by asset managers Cohen & Company, offered 1.8 million more units than originally expected indicating a larger M&A than first thought is in the pipeline.

Blank check companies, or special purpose acquisition companies (SPAC), have the ability to take companies public without going through the traditional initial public offering (IPO) process. This allows retail investors to invest in private equity type transactions, particularly leveraged buyouts.

The aim of INSU Acquisition III is to target businesses providing insurance or insurance related services. And this SPAC has a particular emphasis on insurance distribution businesses, regulated insurance or reinsurance businesses, and insurance related technology businesses, according to Cohen & Company.

John Butler, the head of US Insurance Debt Strategy and Global ILS Platform for Cohen & Company LLC, and Daniel Cohen, the chairman of Cohen & Company LLC and chief executive of the European Business of Cohen & Company Inc, will lead the SPAC as chief executive and chairman respectively.

Both men have served in similar roles for the two previous blank check companies: INSU Acquisition II, which raised $200 million in September 2020 and is waiting to merge with pay per mile car insurance company Metromile; and the first SPAC set up by the asset managers, called Insurance Acquisition, which recently completed its merger with fraud detection and claims automation firm Shift Technologies.

Cantor Fitzgerald and Wells Fargo Securities are serving as joint book running managers for the offering. INSU Acquisition III's units are listed on the Nasdaq Capital Market under the symbol IIIIU and began trading on December 18, 2020. Each unit issued in the offering consists of one share of the company’s class A common stock and one third of one warrant, each whole warrant exercisable for one share of class A common stock at an exercise price of $11.50 per share.