Goosehead Gears Up for IPO

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Goosehead Insurance has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering. No pricing details were given in the filing, but the offering is valued up to $100 million, although this is normally just a placeholder. The company intends to list its shares on the Nasdaq under the symbol GSHD.

The underwriters for the offering are JPMorgan, Merrill Lynch, Keefe Bruyette & Woods and William Blair.

This is a rapidly growing independent personal lines insurance agency, reinventing the traditional approach to distributing personal lines products and services throughout the United States. The firm was founded with one vision in mind, to provide consumers with superior insurance coverage at the best available price and in a timely manner.

This business model, in contrast to the traditional insurance agency model, separates the sales function from the service function, thus enabling agents to focus on selling and service personnel to focus on delivering client service.

Goosehead represents over 80 insurance companies that underwrite personal lines and small commercial lines risks, which typically enables it to provide broader insurance coverage at a lower price point than competing agents who represent only a few carriers, carriers with captive agents or carriers that distribute directly to consumers.

The firm detailed its finances in the filing:

For the years ended December 31, 2016 and 2017, we generated revenue of $31.5 million and $42.7 million, respectively, representing year-over-year growth of 36%. This growth has been driven by our recruiting team’s ability to recruit talented agents to our platform, our agents’ leading productivity in winning new business and our service centers’ ability to retain renewal business. All of our growth has been organic; we have not relied on mergers or acquisitions. Furthermore, we are profitable. For the year ended December 31, 2017 we generated $8.7 million of net income.

Goosehead intends to use the net proceeds from this offering to repay its debt, as well as for working capital and general corporate purposes.