Waterloo’s Definity, parent to Economical Insurance, raises $2.1 billion as it debuts on the TSX – TheRecord.com

The head office of Economical Insurance in Waterloo. Economical’s new parent company, Definity Financial Corporation, has debuted on the Toronto Stock Exchange.

By Brent DavisRecord Reporter

Thu., Nov. 18, 20212 min. read

WATERLOO — Definity Financial Corporation, the new parent company to Waterloo’s Economical Insurance, has gone public in a big way.

Shares of the property and casualty insurer debuted on the Toronto Stock Exchange Thursday, trading under the symbol DFY. Issued at $22, shares closed at $27.17.

Described as one of the largest initial public offerings in Canada in recent years, the company sold about $1.4 billion in common shares — more than 63.6 million shares at $22 each.

A further $707 million in shares was sold through a private placement to the Healthcare of Ontario Pension Plan and Swiss Re Investments Holding Company Ltd., bringing gross proceeds to about $2.1 billion. The initial public offering is expected to formally close on Tuesday.

Created this summer, Definity Financial Corporation will serve as the parent to Economical Insurance, Family Insurance Solutions Inc., Petline Insurance Company, and Sonnet Insurance Company.

Its debut on the TSX brings Economical’s lengthy demutualization journey to a close. The process sees Economical transform from a mutual company owned by about 870 mutual policyholders to a publicly traded company owned by shareholders.

While several Canadian life insurance companies demutualized more than 20 years ago, Economical is the first Canadian property and casualty insurer to do so. The milestone comes as Economical celebrates its 150th anniversary this fall.

With its eyes set on growth, becoming a public company provides critical access to capital markets to fund those ambitions.

“As a mutual company, we really just didn’t believe that we would be able to compete on a level playing field and get to the scale required to be not just a leading insurance company going forward, but also to stay relevant to the increasing demands of our customers,” president and chief executive officer Rowan Saunders said earlier this year.

Demutualization plans also included the creation of a charitable foundation funded by $100 million from the IPO. Net proceeds will also fund the distribution of cash benefits to eligible regular and mutual policyholders, who voted overwhelmingly in favour of the transition to a public company.

Definity is the third local firm to go public this year, following Magnet Forensics and D2L’s launches on the TSX.