Travel insurer Cover-More has become the latest private equity-owned company to join the 2013 float rush, announcing plans to raise $521 million in an initial public offering later this month.
The company, which is 82.7 per cent owned by Crescent Capital Partners, plans to sell 260.2 million shares for $2 each in an offer closing shortly before Christmas, it said in a prospectus published on Monday.
With Crescent holding onto a 13 per cent stake, the share sale would put the insurer's market capitalisation at $635 million, and make it one of the biggest floats of the year.
Chief executive Peter Edwards said strong market conditions had played a role in the decision to float, as well as healthy growth in the company's profits under Crescent's ownership since 2009.
Cover-More is Australia's biggest provider of travel insurance. It has a 40 per cent of the domestic market and agreements to sell policies through companies including Flight Centre, Harvey World Travel, Medibank Private and Air New Zealand.
The prospectus says net revenue grew at a compound annual rate of 18 per cent in the past five years, and forecasts revenue growth of 10 per cent this financial year.
Crescent will continue to own 13 per cent of the business until at least after the 2014 financial year results, but Mr Edwards said this was not a response to investor concerns.
"This is a business that hasn't just popped up overnight. It's been running for 27 years," Mr Edwards said.
While floats of private equity-owned companies often arouse the scepticism of investors, he said, under Crescent's ownership the company had diversified its distribution in Australia.
"This is not something that's been dressed up for sale, it's a long-term sustainable story."
The company is also seeking to tap into growing demand for insurance from middle-class consumers in India and China and has a presence in Malaysia, Singapore, Britain and New Zealand. It owns a business that provides emergency medical help overseas.
In a strong year for floats Nine, Dick Smith, and credit information provider Veda are preparing to float later this week.