Hub goes public

The Hub Group Ltd., a broker consolidator, has gone public listing on the Toronto Stock Exchange as HBG. The initial public offering, underwritten by CIBC Wood Gundy Securities, distributed $11.7 million Hub common shares to the public at an opening price of $13.50. At press-time, HBG was trading at $17.55. Financial holding company Fairfax Financial, which had previously purchased roughly 60% of Hub for $45 million, now holds a 45% equity stake. A previously announced stock swap with Co-operators General Insurance Company — in return for Co-operators holdings in Ontario-based Barton Insurance Brokers — is still pending.

The Hub Group was formed in late 1998 by a merger of eleven insurance brokerages in British Columbia, Ontario, Quebec and New Brunwick. The company’s revenue for the nine months ended September 1998 was $44 million. The group accounts for roughly $400 million in premium volume. In going public, The Hub Groups joins a handful of broker networks that have gone to the public to add to their acquisitional coffers, a list that includes Equisure Financial, Canada Brokerlink and Vector Intermediaries.