By David Bull

May 20 - (The Insurer) - Acrisure has agreed to issue new convertible preferred stock to a group of investors led by Bain Capital that also includes Gallatin Point Capital and Apollo Funds in a $2.1 billion capital raise that the broker and fintech firm said gives it a valuation of $32 billion.

The valuation represents a jump of 40% since the Grand Rapids, Michigan-based company last fundraised from institutional investors three years ago, as it continues to tap private investors on the path to a widely flagged future initial public offering.

Funds raised will go towards refinancing a portion of Acrisure’s existing non-convertible preferred stock, pursuing “strategic” accretive M&A and accelerating its development as a tech-enabled financial services platform, said the company in a statement confirming the capital raise.

This will allow it to advance its strategy to become the “preeminent fintech solutions provider for millions of small- and medium-sized businesses domestically and abroad,” the statement continued.

The lead investment came from Bain Capital Special Situations, with other investors involved in the transaction including Fidelity Management & Research Company, BDT & MSD Partners and a consortium of further backers.

Acrisure said that no existing investor exited as part of the transaction. Morgan Stanley was sole and exclusive placement agent with Skadden, Arps, Slate, Meagher & Flom LLP and Varnum LLP as legal counsel to the issuer.

The company’s co-founder, chairman and CEO Greg Williams said the transaction is a “significant milestone,” serving as proof that its vision for Acrisure’s scaled platform “has become a reality.”

“Our evolution from an insurance brokerage into an AI- and technology-powered global financial services provider has opened the door to massive opportunity. I see limitless potential for how far Acrisure can go, and we’re extremely grateful for the financial support and validation from our investors,” he continued.

In the statement, Acrisure said it will continue to grow its footprint and product offerings through strategic, accretive M&A, as if fully integrates the platform it has created through its previous 900 acquisitions, and drives organic growth with its “robust” suite of tailored offerings.

These include real estate services, cybersecurity tools, payroll and payment processing, as well as retirement and wealth solutions.

Bain Capital partner Cristian Jitianu will join the Acrisure board.

He commented: “We are pleased to be selected as Acrisure’s partner of choice on this transaction and look forward to supporting their continued growth strategy as the Company builds on its success delivering the right personalized insurance and business solutions to its clients.”

‘UNPRECEDENTED GROWTH’

Acrisure said the jump in its valuation to $32 billion was driven by its “unprecedented growth,” as it highlighted work to bolster its executive bench ahead of the funding round to “better fit the company’s go-forward vision and support its best-in-class technology capabilities.”

Since BDT & MSD Partners led a $3 billion senior preferred investment in Acrisure in 2021, the company has increased in size from more than $2 billion in revenue to close to $5 billion.

Its expansion was initially fueled by M&A as the most active acquirer of U.S. retail agencies for several years, as well as building out international, wholesale, MGA and reinsurance brokerage operations.

Its agency roll-up strategy has shifted to one more focused on integration in the last two years.

The company now describes itself as a fintech and has been public in its ambitions to eventually pursue an IPO after being mooted as a likely candidate for the last few years.

Almost two years ago, Bloomberg reported that Acrisure was interviewing banks ahead of a potential IPO in 2024, and last July it announced it had hired New York Stock Exchange vice chairman John Tuttle as president.