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TAMPA - The Baldwin Group announced an agreement to acquire Hippo Holdings Inc.’s (NYSE:HIPO) homebuilder distribution network, a move that will expand Westwood Insurance Agency’s reach to 20 of the top 25 U.S. homebuilders. According to InvestingPro data, Hippo currently trades at $14.28, with an overall Financial Health score rated as "FAIR" based on comprehensive analysis of multiple financial indicators.
The acquisition, expected to close around July 1, 2025, involves a network that generated approximately $29.2 million in revenue over the past 12 months and is projected to deliver about $7 million in adjusted EBITDA in the year following closing. This represents a strategic addition to Hippo’s existing operations, which generated total revenue of $2.68 billion in the last twelve months. InvestingPro analysis indicates that Hippo is currently trading below its Fair Value.
In a separate arrangement, Baldwin’s managing general agency, Millennial Specialty Insurance (MSI), has entered into program and claims administration agreements with Hippo to create a new homebuilder program. Hippo and its affiliates, including Spinnaker Insurance Company, will provide capacity and reinsurance support for MSI programs.
"Through the acquisition of Hippo’s homebuilder distribution network, Westwood now provides an embedded insurance solution to 20 of the top 25 homebuilders across the country," said Jim Roche, President of The Baldwin Group and CEO of Underwriting Capacity and Technology Operations.
The combined network will represent over 35% of total new single-family homes built annually in the United States, according to the company’s statement.
Rick McCathron, President and CEO of Hippo, said the agreement allows his company to "focus on what we do best—risk identification and selection, while providing an opportunity to accelerate the growth of our New Home business through Westwood’s industry-leading homebuilder network."
The transaction is expected to be neutral to Baldwin’s net leverage and accretive to its 2026 pro forma adjusted diluted earnings per share, according to the press release statement. For deeper insights into Hippo’s financial metrics and growth potential, InvestingPro subscribers can access comprehensive analysis including over 30 key financial metrics and exclusive ProTips.
In other recent news, The Baldwin Group announced a major financial development for its upcoming insurance exchange, Builder Reciprocal Insurance Exchange (BRIE). The company has secured $110 million through surplus debentures, with $95 million funded by Gallatin Point Capital LLC and the remaining amount by Baldwin affiliates. This capital infusion, expected in the second quarter of 2025 pending regulatory approvals, aims to support the launch of BRIE, enhancing Baldwin’s builder-sourced homeowners insurance business. The move is part of Baldwin’s strategy to provide more efficient risk transfer solutions to its clients. The Baldwin Group’s affiliated managing general agency, MSI, is set to accelerate its transition from an existing carrier partner, having met all conditions to extend its current Program Administrator Agreement. BRIE will be managed by a Baldwin affiliate serving as the attorney-in-fact, and the notes will not be considered additional debt for Baldwin or its affiliates. Insurance Advisory Partners LLC acted as the exclusive financial advisor and placement agent for the notes. Legal counsel for the transaction was provided by Troutman Pepper Locke LLP for Baldwin and Morgan, Lewis & Bockius LLP for Gallatin Point.
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