Liberty Mutual Plans $1.2B IPO for Agency Division

Liberty Mutual has filed paperwork with securities regulators detailing its plan to sell over 64 million shares of stock of its Agency Corp. division as part of an initial public stock offering (IPO) that could bring in up to $1.17 billion for the insurer.

The IPO, a first for the agency-brokered business of Liberty Mutual Group, would take place “as soon as practicable,” the company said in the filing, although no exact date has been given.

Underwriters for the IPO, would have the ability to sell an additional 6.4 millions shares — 10 percent of the total — which would be listed on the Nasdaq’s Global Select Market.

In the filing, Liberty Mutual said it would use the money to pay down debt, including $130 million related to the 2007 purchase of insurer Ohio Casualty.

The offering follows several years of dramatic expansion, largely through acquisitions, of Liberty Mutual — which is now the second-largest agency-distributed insurance writer in the country.

The expansion began in 2007 when Liberty Mutual bought Ohio Casualty for $2.7 billion. Barely a year later, in Liberty acquired insurer Safeco for $6.2 billion.

Following the IPO, Liberty Mutual Group would hold just over 296 million shares of class B stock of Liberty Mutual Agency Corp. — giving it roughly an 82 percent stake in the remaining business, and 97 percent of the voting power of the segment.