Kingsway Financial Services raises guidance after $15.7 million funding

CHICAGO - Kingsway Financial Services Inc. (NYSE:KFS), which has seen its stock surge over 60% year-to-date according to InvestingPro data, has increased its acquisition target range from 2-3 per year to 3-5 per year following the closing of a $15.7 million private placement, according to a company press release issued Tuesday.

The non-brokered private placement involved the sale of 1,336,264 shares of common stock at $11.75 per share to institutional investors. The company, currently valued at approximately $369 million, plans to use these funds, along with operating cash flow and non-dilutive capital sources, to support its growth strategy. With revenue growth of 6.75% in the last twelve months, InvestingPro analysis reveals 8 additional key insights about the company’s growth trajectory.

"It’s time to play offense," said JT Fitzgerald, Kingsway’s President and CEO. "The results so far have been highly encouraging, and provide confidence it’s the right time to accelerate investment into our public Search Fund strategy."

Kingsway describes itself as the only publicly-traded U.S. company employing the Search Fund model to acquire businesses. The company focuses on acquiring asset-light, profitable B2B and B2C services companies with recurring revenues.

The shares sold in the private placement were issued under an exemption from registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933. Kingsway has agreed to register the resale of these shares with the Securities and Exchange Commission at a future date.

Cadwalader, Wickersham & Taft LLP served as legal counsel to Kingsway for the transaction.

The company maintains a decentralized management model and operates with what it describes as a tax-advantaged corporate structure. The press release notes that Kingsway aims to compound long-term shareholder value on a per share basis through these approaches. Trading near its 52-week high of $14.34, detailed valuation metrics and comprehensive analysis are available in the InvestingPro Research Report, part of the platform’s coverage of over 1,400 US stocks.

In other recent news, Kingsway Financial Services Inc. reported its financial results for the first quarter of 2025, highlighting a revenue increase of 8.4% year-over-year to $28.3 million. Despite the revenue growth, the company experienced a decline in consolidated adjusted EBITDA by $800,000 compared to the previous year. Kingsway also made strategic acquisitions to strengthen its service offerings, acquiring MLC Plumbing and Viewpoint, which are expected to enhance its platform capabilities. Additionally, Kingsway issued a new class of preferred stock, raising $2 million in a private placement to accredited investors. The Class D Preferred Stock offers fixed cumulative preferential cash dividends at a rate of 8% per annum and is convertible into common stock under certain conditions. The company emphasized its ongoing focus on growth in its Kingsway Search Accelerator and extended warranty segments. Furthermore, Kingsway’s leadership team has been bolstered with the appointment of two new independent directors to its board, aligning with its strategic growth initiatives. These developments reflect Kingsway’s efforts to bolster its capital structure and expand its market presence.

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