Lemonade targets $544.5mn from upsized share offering

Insurtech start-up Lemonade intends to offer 3,300,000 shares of its common stock for sale in an underwritten public offering, resulting in net proceeds of up to $544.5 million.

The net proceeds from the offering is based on a public offering price of $165 per share, which is up on the $160.74 per share price on January 12th, when Lemonade first announced plans to offer 3 million shares of its common stock.

Initially, the primary offering was expected to raise net proceeds of around $466.1 million, after deducting underwriting discounts and commissions and offering expenses.

However, the addition of a further 300,000 shares and the higher share price, has pushed this up to as much as $544.5 million, with underwriting discounts and commissions and offering expenses needed to be accounted for.

Additionally, Lemonade now intends to grant the underwriters 30-day options to purchase up to an additional 723,647 shares (compared to the previous 678,647 shares) of Lemonade’s common stock, which could see the insurer raise a further $119.4 million.

The company said previously that it intends to use the net proceeds from the offering for general corporate purposes, including working capital, operating expenses and capital expenditures.

Lemonade’s share price has more than tripled at a rate of $165 per share since September 2020, when it was just $50, having nearly doubled in December at $92.

The offering is expected to close on January 19, 2021, subject to customary closing conditions.

Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Allen & Company LLC and Barclays Capital Inc. are serving as the joint active bookrunners for the Offering. JMP Securities LLC, Oppenheimer & Co. Inc., Piper Sandler & Co. and William Blair & Company, L.L.C. are acting as co-managers for the Offering.